## Using Fibonacci Numbers to Target Future Prices

Because prices frequently conform to Fibonacci ratios when creating support or resistance zones, it is possible to use Fibonacci numbers to anticipate where an advance might stop. Figure 6-6 shows one set of Fibonacci numbers for one advance of Liberty Corp. Levels 1.38 and 1.62 show likely resistance levels if the advance should become reestablished. HB 2V*TB 26.25 22.25 26.25 18 2B 94 FHI 10 25 94 TUE Figure 6-5 Weekly plot of Infocus Systems. An accordion composed of Fibonacci numbers...

## Using Fibonacci Numbers and Ratios to Establish the Timing of Future Changes in Trend

Fibonacci numbers and ratios can also be used to predict when it is likely that a change in trend will occur. We use the ratio to measure and forecast time rather than price. Here we can put the calipers, that is, the 0.00 and 1.00 vertical bars, between two lows a low and a high, a high and a low, or between two highs. Figure 6-10 is a weekly plot of Lechters stock. Here the basic measurement was between two lows. Note how changes in trend or high volatility bars occurred within a bar of the...

## Other Methods Of Plotting Price Action Renke Kagi And Threeline Break

Steve Nison, a well-known authority on candlestick charting, has also written about other Japanese methods of plotting price action, such a3 Kagi, three-line break, and Renko. The use of these techniques is beyond the scope of this book, but the reader should be aware that there are other techniques beyond bar, candlesticks, and point-and-Figure Need 80 or lower to reverse and plot three Os going down Figure 3-20 ExampLe of a point-and-figure plot. Figure 3-21 Example of a point-and-figure plot...

## Moving Average Convergence Divergence Oscillator Macd

In 1979 Gerald Appel improved the price oscillator, discussed in Chapter 3, by adding a moving average of the price oscillator itself. Buy signals came when the price oscillator moved above the second moving average, called a trigger line. He called the new technical oscillator the Moving Average Convergence Divergence Oscillator, or MACD (pronounced M-A-C-D, or Mac-D). Buy signals are generated when the price oscillator goes above the trigger line, and sell signals come when the price...

## Forecasting Profits Using Price Time

New York Chichester Weinheim Brisbane Singapore This text is printed on acid-free paper. Copyright 1998 by Ed Gately. Published by John Wiley amp Sons, tnc All rights reserved. Published simultaneously in Canada. Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requesta for permission or farther information should be addressed to the Permissions...

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Fundamental Plus Third Harmonic Sine M - 1 3 Sine 3 wt Figure 2-14 Development of a square wave from its fundamental and harmonic components. Fundamental Plus Third Harmonic Sine M - 1 3 Sine 3 wt Figure 2-14 Development of a square wave from its fundamental and harmonic components. Since the price movement of a stock tends to be cyclic, Fourier analysis can be applied to the historical data, and forecasts into the future can be made. Fourier analysis is a standard mathematical technique for...

## Oscillators

Although channels are a good way of trading, they can be improved by obtaining confirmation from other sources. A group of indicators that can confirm the channels are called oscillators. Many people have studied the securities markets with the hope of inventing a perfect oscillator, and there are probably at least 100 oscillators appearing somewhere in the literature none of them perfect, but some of them quite useful. They vary from A, the Accumulation Swing Index, to U the ultimate...