Retracement


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Retracement

A price movement in the opposite direction of the previous trend.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Retracement

A situation in which a price begins to move back toward its former price after it has changed significantly in a brief period of time. An example of retracement occurs when a stock falls 10% but then recovers 8%.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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On the other hand, if the DFMGI breaks below the 88.6 per cent retracement level with momentum, it heads towards the 2016 low and has a good chance of breaking below it eventually.
Note that the market is coming off 61.8% retracement and completed 2 sets of ABC corrections 6 perhaps a double 3 in Elliott wave terminology.
Last week's price behaviour has created a bullish weekly candle pattern and it occurred around support of the 61.8 per cent Fibonacci retracement price level of 6.02.
Support at 3.15 is the 21% Fibo retracement from 2.79 to 3.241.
Certainly, in the short-term a retracement higher may be seen, in which case watch for resistance around 3,489, followed by the 3,511 price area.
Only a daily close below this level would suggest top is possibly formed and risk minor correction to 1.2915 (38.2% Fibo retracement of 1.2503-1.3169) but the Tenkan-Sen now at 1.2835 and previous support at 1.2755 should hold, and bring on another rise later to the upside targets.
50% retracement of the Nov-Dec rally at 97.157 provides support.
The 50 per cent retracement level (3,505.08) of the prior downtrend off the October peak was also reached.
Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician Leonardo Fibonacci in the thirteenth century.
That's a roughly 10-point bounce in two sessions from Nov-Dec lows and puts October 28.84 highs within reach, while 20.0 remains the 50% retracement pivot.