# Profit target area

863 0
Calculates short-term support and resistance and shows areas where put profit targets. Area calculation is based on retracement levels 38% and 62%

Assuming that price always tests previous resistance and performs 38% or 62% retracement. So if area above or below are 62% or 38% of the movement, current resistance-support is 100-62 or 100-38. Result area is rest part above resistance to fill 100% of movement (same below).

When price breaks the support or the resistance, put profit target into the area.

You should always watch not only current suggested area, but also previous areas because detecting supports and resistances is not always perfect
study("Profit target area", overlay=true)
fn_descending(src) =>
(nz(src[0]) <= nz(src[1])) and (nz(src[1]) <= nz(src[2]))  and (nz(src[2]) <= nz(src[3]))
fn_ascending(src) =>
(nz(src[0]) >= nz(src[1])) and (nz(src[1]) >= nz(src[2]))  and (nz(src[2]) >= nz(src[3]))
sl = fn_ascending(low) and not fn_ascending(low[1])
sh = fn_descending(high) and not fn_descending(high[1])
st = sh?true:(sl?false: nz(st[1]))
h = st[0] and not st[1]?highest(high,10):nz(h[1])
l = not st[0] and st[1]?lowest(low,10):nz(l[1])
f = h - l
h38 = l + f/(1-0.382)
h62 = l + f/(1-0.618)
l38 = h - f/(1-0.382)
l62 = h - f/(1-0.618)

ph = plot(h,color=green, title="resistance")
pl = plot(l,color=red, title="support")
p3 = plot(h38, color=#CCEECC, title="38% above")
p1 = plot(h62, color=#DDDDFF, title="62% above")
p2 = plot(l62, color=#DDDDFF, title="62% below")
p4 = plot(l38, color=#CCEECC,  title="38% below")
fill(p1,p3,color=#DDDDFF, transp=0,  title="62% above")
fill(p3,ph,color=#CCEECC, transp=0,  title="38% above")
fill(p2,p4,color=#DDDDFF, transp=0,  title="62% below")
fill(p4,pl,color=#CCEECC, transp=0,  title="38% below")
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