Fibonacci levels can provide levels of potential support and resistance for a stock. Fibonacci Retracements and extensions, in conjunction with moving averages and flat line support/resistance can help provide traders with important levels to look at for a potential reaction in the stock price.

The important Fibonacci levels are: 23.6%, 38.2%, 50.0%, 68.1%, and 78.6%.

These Fibonacci number sequence, and he derived ratios for price retracements and extensions, follow a mathematical formula. Learn more here on Wikipedia.

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