Intel INTC Fibonacci Confluence August 5
A reader brought to my attention from my last “Chart Art Arc” post on Intel (INTC) that price also reflects a large-scale 50% Fibonacci Retracement. He’s right, but I also wanted to show a second important Fibonacci Confluence at the $20.00 price level that also adds an interesting twist to the price chart. Let’s take a look:
(Click for Full-Size Image)
What I’ve done this time is draw two Fibonacci Grids off the $12.05 lows both at the end of 2008 and beginning of 2009 to two separate price highs as shown on the chart – from December 2007 and August 2008.
What we see is a simple (no frills) Fibonacci grid that comes down off of both of these levels.
What is interesting is that two levels intersect at the $20 level – the 50% Fibonacci Retracement from the 2007 highs also corresponds with the 61.8% (shorter-term) Fibonacci grid from the 2008 highs.
Generally – though certainly it is not guaranteed – when we develop long-scale Fibonacci confluences at a certain level off of two separate price highs to a single low, this level provides resistance when challenged as we have done currently.
We’re seeing a downswing that appears to be forming off this level as mentioned in my prior, more esoteric “Arc Post” on Intel.
Let’s see if the $20.00 does indeed hold as expected resistance… or if the bulls just can’t be stopped at all.
Thank you to all readers and commenters on the blog – it’s so helpful to share insights that others might miss (like the Fibonacci grid above – I didn’t think to draw one!).
Corey Rosenbloom, CMT
Hi Corey,
Its really amazing how these fibonacci tools work, lately i've been using them quite a bit. I don't mean to overcomplicate things but i also wanted to point out how if you were to draw an Andrew's Pitchfork from the low in January of 08 to the High in May of 08 back to the low of November of 08 you can see how the 50% line of the Pitch Fork crosses right at the current resistance level.
That doesn't complicate it at all!
That's exactly what we're looking for in advanced TA – price zones of confluence across non-correlated methods (like Fibo, Arcs, Andrews, etc).
None are magical but when two or three methods align at a certain price, that gives us a hidden level to put a tight stop and play for a much larger target – no guarantees of course.
Hi Corey,
Its really amazing how these fibonacci tools work, lately i've been using them quite a bit. I don't mean to overcomplicate things but i also wanted to point out how if you were to draw an Andrew's Pitchfork from the low in January of 08 to the High in May of 08 back to the low of November of 08 you can see how the 50% line of the Pitch Fork crosses right at the current resistance level.
That doesn't complicate it at all!
That's exactly what we're looking for in advanced TA – price zones of confluence across non-correlated methods (like Fibo, Arcs, Andrews, etc).
None are magical but when two or three methods align at a certain price, that gives us a hidden level to put a tight stop and play for a much larger target – no guarantees of course.