Fibonacci Number and Ratio Analysis
10.6.2 Calculating potential resistance via Fibonacci
upside expansion Levels
When calculating Fibonacci upside expansion levels, we may use either the
significant peak (point B) or the significant trough (point A) as the base for the
expansion. By convention, we should use the trough at point A for all upside ex-
pansion calculations, even though both approaches will give the same results.
Assume that the significant trough and peak of an observed price range are point A
and point B, respectively. Assume that the trough at point A is at the price level of $50
and that the peak at point B is at $110. Refer to Figure 10.28 as a visualization guide.
The formula for calculating downside expansion levels below a given price
range is:Trough (Price Range Expansion Ratio)+ ×In our example, the observed the price range AB is:Price Range Peak Trough
B A
110 50
60=−
=−
=−
=
$ $
$
(Note: We always subtract the trough from the peak, regardless of whether it
is for a downside or upside expansion calculation, as the price range must always
be a positive value.)
The 127.2 percent upside expansion level is:=+ ×
=+ ×
=Trough Price Range Expansion Ratio
A Price Range 1 272( )
(. )
$550 60 1 272
126 32
+×
=
($. )
$.
The 300 percent upside expansion level is:=+ ×
=+ ×
=+Peak Price Range Expansion Ratio
A Price Range 3 0
50( )
(. )
$ ($$. )
$
60 3 0
230
×
=
The 423.6 percent upside expansion level is:=+ ×
=+ ×
=Peak Price Range Expansion Ratio
A Price Range 4 236
50