Short Term Trading Weekend Xmas Lounge: 16-18 Dec, page-97

@radx
A bit of history first

Fibonacci
Mathematician
Leonardo Bonacci —known as Fibonacci, and Leonardo of Pisa, Leonardo Pisano Bigollo, Leonardo Fibonacci—was an Italian mathematician, considered to be "the most talented Western mathematician of the Middle Ages". Wikipedia

Born: 1175, Pisa, Italy
Died: Pisa, Italy
Full name: Leonardo Pisano Bigollo
Nationality: Italian

The Fibonacci sequence is a series of numbers where a number is found by adding up the two numbers before it. Starting with 0 and 1, the sequence goes 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so forth. Written as a rule, the expression is x_n = x_n-1 + x_n-2.
http://www.livescience.com/37470-fibonacci-sequence.html

Fibonacci Levels in Trading
A Fibonacci retracement is a term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going higher).
Fibonacci retracement levels use horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before the trend continues in the original direction.
To answer your question;
These levels are created by drawing a trendline between the high and low and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.

Read more: Fibonacci Retracement Definition | Investopedia http://www.investopedia.com/terms/f/fibonacciretracement.asp#ixzz4T90WpfSs

So e.g.;
This chart CYP I beleive is a good example atm;



I drew a trend line between the low to the high,
You can then see that it then retraces to the 61.8.
Then runs alongs the 50% before bouncing back uo to the " 0 " line.
Back for a little think about the 38.2%, then boom, up for a new top.
Before retarcing again back to the 38.2%.
Now continuing to range, and looking at the history,
You could say imo that volume withstanding,
.75+ would not be an unrealistic ST target imo
if the trend was to continue.

I hope that helps,
Is it an exact science?
No, I beleive not.
Another tool in our Trading tool box,
to compare and cross reference with all the others,
especially FA.
It's uncanny though, you can generally see the behaviour
of a stock in my experience hover around and respect these
different levels.
I liken it to the perfect symmetry of a flower petal,
Maths is an intrinsic part of the Universe, Nature
and how it operates imo.
Don't ask me how,
but there is an intrinsic genius to
exponetial mathamatics,
A beauty that creates artistic patterns.

Don't forget you can get multiple veiws by going back years,
As to compare the overall stocks performance with the current trend etc.
Extensions are another story for another chapter.
Heaps of videos on youtube etc,
Google is your freind
GL.