Fibonacci Number and Ratio Analysis
The first and third clusters listed above occupy approximately 5 percent of
the retracement range and represent a band or confluence of either supportive or
resistive levels, depending on whether price is above or below these bands. There-
fore when trading the markets, it is prudent to bear in mind that there is a strong
possibility of price experiencing support anywhere within the upper or lower 5
percent support zones in a downside retracement, as depicted in Figure 10.48.
Figure 10.49 illustrates the position for upside retracements.Figure 10.48 Upper and Lower 5 Percent Support Zones in a Downside Fibonacci
Retracement.Figure 10.49 Upper and Lower 5 Percent Resistance Zones in an Upside Fibonacci
Retracement.