From which Retracement level will price make a reversal ? 0.618 is Golden ratio but do all reversals take place on 0.618 level? How can we choose a retracement level which more possibly triggers a reversal? Combination of Fibo Retracement with other types of Fibonacci like projection and extension can make a support zone instead of a single level. We call this support zone as "Price Reversal Zone " or " Potential Reversal zone" or just simply a PRZ. Having knowledge about Elliott wave counting and internal structure of each wave can help to make a more probable PRZ. I used TSLA Chart to demonstrate an example for this concept. here wave A of Tesla is clearly subdivided to 5 waves. if you can recognize a subdivision of a wave you will be able to detect a support zone more precisely. As you can see there is nice overlap between 3 types of Fibonacci which makes a very narrow range and suggest a strong support zone for the stock and as we speak after the fact you can see price had a nice reaction to this PRZ and trend was reversed. another interesting point is when price reached to this PRZ, Stochastic indicator was in oversold zone an after reaction to support zone made a bullish reversal. every thing was in place to go long.
What can we learn from this? an immediate answer will come soon when internal structure of upcoming wave C of TSLA shows itself. I will show you an accurate estimation of the end of correction support zone with combination of different types of Fibonacci in 2 different wave cycles.