the hAnDbook oF teChnICAl AnAlySISfiGure 19.28 Locating Support and Resistance Geometrically on the Square of Nine
Chart.
To locate the next Gann quarter‐cycle support and resistance levels, simply
add or subtract 0.5 to the square of the commodity price and subsequently find
the square root of that total (add for resistance and subtract for support). Assume
that the commodity is priced at $105 per kilogram.
Square root of $105 = 10.24$
■ (^) To find the next 90‐degree resistance from $105, add 0.5 to $10.24
■ (^) $10.24 + $0.5 = $10.74
■ (^) Square this number to get $115.35
■ (^) Rounding down to the closest integer we get $115 (which matches our geo-
metrical result obtained earlier)
Similarly, to find the 90‐degree support level:
■ (^) Subtract 0.5 from $10.24 = $9.74
■ (^) Square this number to get $94.86
■ (^) Rounding up to the closest integer we get $95 (which matches our geometrical
result obtained earlier)
To find the 180‐, 270‐, and 360‐degree support levels, just repeat the proce-
dure above replacing 0.5 with 1, 1.5, and 2, respectively, which should yield $85,
$76, and $68. To find the 180‐, 270‐, and 360‐degree resistance levels, replace
0.5 with 1, 1.5, and 2, respectively. This should yield potential resistance levels at
$126, $138, and $150.
Figure 19.29 is a chart of four‐hour gold prices. We observe the price range
around the $1518 to $1522 support zone being forecasted weeks before it was