Fibonacci Retracement

Fibonacci Retracement is a charting tool that predicts where a stock price might find support (a floor) after it's been rising. It uses a mathematical sequence (1, 1, 2, 3, 5, 8, 13...) to mark horizontal lines at specific percentages—typically 23.6%, 38.2%, 50%, 61.8%, and 78.6%—between a stock's recent low and high points. Technical traders use these levels to guess where buyers might step back in if the price pulls back. You'll see these lines on price charts when traders are analyzing momentum. For example, if TechCorp stock rose from $50 to $100, a Fibonacci level might suggest it could find buyers around $61.80 on the way down. It's not guaranteed—just a probability tool traders watch.