The Fibonacci Golden Ratio can be found in numerous fields of life – cosmos, weather, heartbeat, DNA structure, plants, animals and even the human body. It seems that this 0.618 – 0.382 ratio is one of nature’s laws. People are a creation of nature. The financial markets are created by people and they are places, where people interact, so it follows, that we should be able to find the Fibonacci Golden Ratio on the markets. Some traders do, indeed, use the 61.8% level in their trading. It often occurs, when we measure a correction in respect to its corresponding impulse.
Recommended reading: The Fibonacci magic in the real world
The weekly chart of India Index ETF provides a good example of how accurate the Fibonacci level could be. Note that wave II/B ends almost exactly at 61.8% of wave I/A. It offers a strong support to the start of wave III/C to the upside.
If this is the correct count, then we should expect wave 4 and 5 of (1), before the corrective wave (2) begins. However, all this price action is just a part of a larger uptrend. Future looks bright for the India Index ETF.
