Thursday, September 8, 2011

Reliance - drawing retracements

Sudhin asks "could you please explain how we are to fix the high and lows for calculating the fiboancci levels, for example in ril we have a low in place but how do we fix the high, as we have around 4-5 swing highs up to Jan 6th, if you could put up a chart it would be of great help. "

Please refer to the chart below. When drawing retracements to identify pullbacks in a downtrend, select the lowest low. I have marked this point. Now, move to the left of this low and select two or more swing high points. when two points are together, select only one of them. In this way, you draw retracements from a number of significant highs to one fixed low.By this time your chart is full of lines. That is fine. You are looking for clusters - areas where two or more levels come close. It is these clusters that should provide targets / resistance. Two charts - first, example of selecting the swing points, then the retracement levels (full of lines). retraecment chart shows possible levels from December 10.


amarjeet said...

please advice some books and sites where we trained eye see ELLIOT WAVE THEORY.

RS said...

Hi Sir,

Thanks for the neat clarification on Fibonacci Rets. I have a query, an I get confused so many time finding answer to this. put plainly, in the first charts, why arn't u counting peaks to right of point 1 as a swing?? Same for peak to the left of point 2 (this one is, albeit, small.

Is there a particular rule for counting a peak as swing ?? that u adhere to?

RS (Baba)

rocky said...

hello sir, i want to clarify sthing like in real time technical analysis the chart showing 5 min, 15 min and so-on suppose if we took a position @ 9;25 and position going against our favour so we have to wait till 9;30 in span of 4 min the prices can be moved an where so how to tackle this situation. please explain sir