NISM Certifications · NISM-Series-XV: Research Analyst · Technical Analysis
A stock rises from Rs 200 to Rs 300 and then retraces. Using Fibonacci retracement levels, at which price would a 38.2% retracement of this advance be expected to occur?
The 38.2% retracement level is Rs 261.80. The advance from Rs 200 to Rs 300 is Rs 100, and 38.2% of that is Rs 38.20, which is subtracted from the peak of Rs 300 to locate the likely support.
- ARs 238.20
- BRs 250.00
- CRs 261.80Correct
- DRs 276.40
Explanation
The advance is Rs 100. A 38.2% retracement is Rs 38.20, deducted from the high of Rs 300, giving Rs 261.80. Rs 238.20 wrongly adds 38.2 to the low, while Rs 250 is the 50% level. Rs 276.40 is not a standard retracement of this move.
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