A Fibonacci retracement is when a stock retraces 23.6%, 38.2%, 50%, or 61.8%. Fibonacci retracements use horizontal lines to indicate areas of support or resistance at the key Fibonacci levels. It is sometimes said that when a stock retraces more than 61.8%, the move should be considered a trend change. In any event, these retracement levels can be combined with other indicators and price patterns to create an overall strategy.

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