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06.10.2019

AAKASHAYA PATRA SEVEN STAR SMART EDUCATION SERIES PART – 28  

Fibonacci Extension in Down Trend

Below are two internal trend (Swing)

1) Primary Trend ( Main Trend - Long Term Trend)

2) Secondary Trend (Correction Phase) where price is growing / decline against primary trend

Fibonacci Extension in Down Trend mainly use to forecast the future probable
support level of the price, once correction in the Down Trend is over Now how we can identify that correction in the Down Trend is over...Its a very simple...when stock price crossed the "point B" it means when it cross it previous support price where
previously it was supported, if that price break out the last support price that means
correction phase is over and stock might be fall further dawn ward side to match direction with its Primary Trend (Down Trend) and will make new Lower High and Lower Low which will be Lower side as compare to its previous high and low Now how to use Fibonacci Extension tool on stock price chart...once again its a very simple..select the swing High and swing Low ...connect High point (Point A) of the swing High and Low point of the swing Low (Point B) with Fibonacci Extension tool..you will find level as per the Fibonacci Extension levels 23.6%. 38.2%, 50.0%, 61.8% 78.2% and 100.0% The stock price on that levels will be probable future support price for that respective stock, stock may get support at that level and might stop further decline from that points

Here one point is most important
Confirmation of the correction phase is over is only and only when stock price crossed its previous support price and started to trade below from that price...Then and Then you can think about correction phase is over and stock price will make new lower high and lower low as compare to its previous high and low Hope this article on Fibonacci extension in Down Trend will helpful for all of you to find
future support level of the any stock in Down Trend with the help of Fibonacci Extension tool.

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