Fibonacci Numbers

FIBONACCI NUMBERS
Primary Ratios
61.8% Retracement	An important retracement gauge for stocks that are selling-off or an impulsive rally that fails to create a new high. A reversal here would mean a continuation of the prevailing trend. Defining measurement of the Gartley and Crab pattern.
161.8% Extension	Usually represents exhaustive price action. When a stock exceed this measurement, it represents an extreme price action that is difficult to sustain. Prices above/below this level indicates that a stock is overbought/oversold. Price action beyond this level tends to happen quickly.
Primary Derived Ratios
76.6% Retracement	Known as the “last chance reversal area” before testing the point of origin (100% retracement). Failure to reverse from this point usually indicates a high probability of retesting previous highs or lows. Defining measurement of the Butterfly Pattern.
86.6% Retracement	A more critical breaking point of a pattern compared to the 78.6% retracement. A close on or above this level usually indicates that the retest of the recent high or low is almost imminent. Defining measurement of the Bat and Shark pattern.
113.0% Extension	Known as the “failed wave” as false breakouts or breakdowns usually occur in this zone. Defining measurement of the Shark and the 5-0 pattern.
127.2% Extension	The first point to examine (as initial support or resistance) after a stock has broken beyond its recent high/low. This is the first area to take profit. Western markets use this point to short or cover shorts. Defining measurement of the Butterfly pattern.
Complimentary Derived Ratios
38.2% Extension	Mostly associated with a sharp pullback after a strong move or an extreme price action. Usually leads to another extreme price move of the prevailing trend. This is where flags and pennants form. Prices tend to move to the 161.8% extension when the prevailing trend resumes. Defining measurement of the Bat pattern.
50.0%, 1.0% and 2.0% Static Numbers	Not as harmonic as other measurements. These numbers are used only to complement a potential set-up.
224.0%, 261.8%, 314.0% and 361.8% Extreme Numbers	Numbers utilized when price action has exceeded the 161.8% extension. This is where prices are most volatile and reversals can be quite dramatic. The 50.0% retracement is a defining measurement of the 5-0 and Bat pattern.