FIBONACCI LEVELS 12 Jan 2010
ABOUT FIBONACCI LEVELS:
Fibonacci levels are basically Support and Resistance levels generated using 5-day’s chart (i.e) 5 day’s High, Low and Close. Hence they are more accurate than Pivot
levels which are generated using previous day’s High, Low and Close.
Generally stocks look bullish above the previous day’s High and bearish below previous day’s Low. So Previous Day’s high is the minor resistance (MIR) for the
scrip and the Previous Day’s low is the minor support (MIS) for the scrip.
Stocks look strong above the 5-day’s High and weak below 5-day’s Low. So Previous 5-day’s high is the major resistance (MR) for the scrip and the 5-day’s low is
the major support (MS) for the scrip.
MR INDICATES MAJOR RESISTANCE- 5 DAY’S HIGH
MS INDICATES MAJOR SUPPORT- 5 DAY’S LOW
MIR INDICATES MINOR RESISTANCE- PREVIOUS DAY’S HIGH
MIS INDICATES MINOR SUPPORT- PREVIOUS DAY’S LOW
SCRIP LOOKS BULLISH ABOVE PREVIOUS DAY’S HIGH
SCRIP LOOKS STRONG ABOVE 5 DAY’S HIGH
SCRIP LOOKS BEARISH BELOW PREVIOUS DAY’S LOW
SCRIP LOOKS WEAK BELOW 5 DAY’S LOW
LTP is the Last Traded Price for the scrip
HOW TO USE IT:
For e.g. For Aban Offshore Jan Futures LTP is 1343 .MS is 1153 which is the major support below which the stock is extremely weak and MR is 1348 which is the major
resistance above which the stock is extremely strong.
Suppose the stock currently trades at 1343, above 1348 long position can be built for the first target of 1386 and if it cuts 1386 it can go up to the second target of 1408
and the stop loss can be placed at 1311 Since the trend is sideways it becomes bullish after it cuts 1348(MIR) and becomes extremely strong after it cuts 1348(MR) levels.
ABAN OFFSHORE LTD JAN10
1523 1195 1219 1244 1274 1322 1370 1400 1425 1449 1478 1527 1576 1606 1630 1655 1684
ABB LTD JAN10