How to Use Fibonacci Retracement Levels

Fibonacci retracement line, which is often referred to as the golden mean line, can be used in technical analysis to determine the strength and position of stock price retracements or rebounds, and is popular among advanced investors. Here we use a weekly trend chart of the s&p 500 index for demonstration:

Click on the "Fibonacci retracement line" tool and lock in a high point and a low point from right to left on the chart, then an automatic Fibonacci retracement line will be drawn, which includes very important retracement levels such as 23.6%, 38.2%, 61.8%.

In this trend chart, it can be seen that the index has gained support at several key levels during the retracement, and technical analysts often capture potential trading opportunities near these prices.