Fibonacci Number and Ratio Analysis
Figure 10.29 Fibonacci Downside Expansion on SLV (iShares Silver Trust NYSE).
Courtesy of Stockcharts.comFigure 10.30 Fibonacci Upside Expansion on Starbucks Corp.
Courtesy of Stockcharts.comThese percentage expansion levels are similar to the conventional or popular
extension percentage levels. See Figures 10.27 and 10.28.
Figures 10.29 and 10.30 are examples of downside and upside expansions,
respectively. In Figure 10.29, we see price reacting at the 161.8 percent expansion
level of the range AB, at point 1. This is further supported by a channel bottom, in-
creasing the potential for a reaction or pullback. In Figure 10.30, we also observe
a resistive confluence at point 1, comprised of a 150 percent expansion level, a
trendline test, and an overbought signal on the stochastics. Price subsequently
retraces from the resistance zone.