More Bounce To The Ounce
Fibonacci retracements are utilized by a growing number of traders, and if
you are not making use of this tool, you should be. In the Insights
From The War Room, one of the favorite techniques of some of our
analysts is to look for moves off Fib retracements and either a moving average,
support level or a pattern setup at the retracement area.
Back on May 31, we posted an alert that Advanced Energy Industries
(
AEIS |
Quote |
Chart |
News |
PowerRating)
appeared to be bouncing off an area near a 50% Fibonacci retracement and the
50-day moving average.
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Other factors that made the setup interesting, in addition to
the convergence at this area, was the appearance of support coinciding with the
April 25 post-breakout low. Throw in an inside day (suggesting a change in
direction) and it appears the retest has been successful.
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AEIS proceeds to go on a multi-day run, tracing out six
consecutive higher lows, and a gain of more than 9 points.
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While not the Holy Grail, a panacea or a magic bullet, Fib
retracements are a very useful tool when used in conjunction with additional
technical signals. Keep looking for the 38.2%, 50% and 61.8% RT levels on the
daily charts combined with additional factors to confirm the possible
directional change. All of us at TradersWire will
continue to do the same.
Have a great weekend, everyone.
Duke
P.S. Great work last night, Avs. Duplicate it in game 7 and let Ray kiss Lord
Stanley’s Cup!!!!!!