Example of The Retracement TheoryOn the chart I include the formula and a example of how to get shirt term price targets using the retrace theory.
Basic retracement theory
(B-A)+C
(130.77-128.71)+129.94=$132
the low = A
the retrace high = B
current retracement low = C
Trend Strength Maximum Retracements Upside Targets (downside targets are inverse)
Very Strong
-14.6% to 23.7%
A to B added to C
Easily exceed B
-Strong
38.2%
A to B added to C
Easily exceed B
-Medium Strong
38.2% to 50%
80% of A to B added to C
Should Easily exceed B
-Medium
50%
80% of A to B added to C
Should Easily exceed B
-Medium Weak
61.8% to 50%
80% of A to B added to C
Possibly exceed B
-Weak
61.8%
80% of A to B added to C
Possibly exceed B
-Very Weak
85.4%to 76.3%
80% of A to B added to C
Probably will not exceed B
