Are the celebrations on the American stock exchange ending?

TransStock > Analysis > Are the celebrations on the American stock exchange ending?

After 2009, the American stock market index rose with an average of 36% per year: phenomenal performance, which trumps every type of investment. With such a rise, it is impossible to avoid many who boast about their performance. Every investor who benefited from this is delighted to have seen the value of their portfolio triple over a period of barely 8 years.

After such an increase, it makes sense that the good times have to end at some point. This means that after a steep increase, you can find prices that move sidelong or corrections (reculer pour mieux sauter). Sufficient reason to monitor the support and resistance in this contribution.

Support and resistance levels develop, because stock prices often stay at the same level. Often, these are round numbers, such as 1500, 2000 and 2500 on the American S&P500 index. If you look at the graph on the long term, the previous tops (resistance) and bottoms (supports) are clearly visible. If the index rises through its historic top, you can no longer compare it to the past. Fibonacci is an excellent tool to determine the new price targets. 

Who or what is Fibonacci?

Leonardo of Pisa was a mathematician from the 13th century who wrote books. Thanks to his first book, we no longer write in Roman numerals today, and as a result of his third book, you are able to increase the returns of your portfolio!

Fibonacci was Leonardo’s nickname and means “Son of Bonaccio” in Latin. His father traveled a lot, took his son along occasionally, and during those travels with his dad, Fibonacci wrote books. His third book was about the Fibonacci sequence: a sequence of numbers where every number is equal to the sum of the two previous numbers: 1,1,2,3,5,8,13,21,34,55…

The relation of a number with its preceding number is always equal to 1.618 as of the third number. We call this the golden ratio. It is denoted by the Greek Phi. On the internet, you will undoubtedly find interesting applications derived from Phi. 

Price targets and corrections

If you multiply the number 100% and then continue to multiply with the number Phi, it will result in 161.8%, 261.8%, 423.6%… These are the price targets when a share breaks through an important resistance. We will also add the number 200%.

If we divide the number 100% and then continue to do so with the number Phi, it will result in 61.8%, 28.2% and 23.6%. We add 50%: the value between 0 and 100%. These are the possible price corrections after a long period of rising or the possible price recoveries after a long time of falling. 

Aside from horizontal price targets and corrections, a technical analyst also uses the Fibonacci spirals, arches, time zones and fans. In doing so, the reliability increases and the analyst does not only end up with a prediction on the basis of course, but also on the basis of time. 

The S&P500

Two Fibonacci figures can be found in the graph above.

De eerste vertrekt van de bodem in 2009 en loopt tot de top in maart 2010. Ziet u uit die beweging de automatische steunlijn op 38,2% en de koersdoelen 127.2%, 161.8%, 261.8%?

De tweede beweging heb ik getekend vanaf de uitgesproken bodem van februari 2016 tot de top in maart op 2106. Ook hier ziet u de steunlijn op 38,2% die erop volgt. Dit is tegelijk uw eerste controle dat u de top goed hebt gekozen. De automatische koersdoelen 127.2, 161.8, 200 en 261.8 zijn duidelijk .

Op figuur twee ziet u dezelfde grafiek op 3 jaar. Naast de vorige Fibonacci beweging heb ik nog een tweede toegevoegd op basis van de top in september 2016. Het koersdoel daarvan valt opnieuw samen met de weerstand rond 2580 punten. Weliswaar kunt u 1% à 2% foutmarge toevoegen en zo verkrijgt u een weerstandszone van 2580 tot 2630 punten.

Kan de beschreven weerstandszone breken?

Absoluut, maar veel trendbeleggers zien dit signaal en nemen geen nieuwe positie zolang deze weerstand standhoudt.

Omgekeerd zijn 2500 en 2400 belangrijke steunen. Verbindt u tevens de bodems door schuine steunlijnen (S1 en S2) en de toppen door schuine weerstanslijnen (R1 en R2) dan verhoogt u de betrouwbaarheid van uw analyse.

Uit dit artikel onthouden we twee elementen uit de technische analyse die ons helpen om succesvol in aandelen te beleggen:
  • Gebruik Fibonacci voor het bepalen van koersdoelen en koerscorrecties
  • Gebruik bijkomende elementen om de betrouwbaarheid van uw analyse te verhogen
Paul Gins
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The trend is your friend

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