How I nailed the high on UIS using Fibonacci

Firstly, I bought UIS on a 50% retracement. Using a high of .89 and a low of .40, you see where a 50% retracement is. You could've used .28 as your low and .66 (an exact level) would've been a 38.2% retracement. Since I now have confirmation, I move on to the next step. 

I use 50% retracements because stocks tend to retrace half of their gains. (more on this later)

My target was .65, it fell to .66 and I bought in at .68. At this point in time, I now own 1500 shares.

So now what? What do you do now? Trade it? Sell it for a 15% profit?

I hold to see if it takes out that high of .89. If it fails, I sell.

So here we are with a blank slate. It has gapped open and broke those old highs with ease. So where do I sell? $1? It's a good round number. Should have resistance here right? 

I hold. This is a text book break out pattern. I now need a sell target. 

First, I need to find the high that the 1.36 was a retracement of. So how do you do this? Well, you can either look at the price history and draw in some lines, or you can use what in my experience works even more so. Fibonacci.

From the chart and Fib lines drawn in, you can see that 1.36 was a 38.2% retracement from the high of 2.97. Your high hitting a fib line is confirmation that you've found the high other people are looking at. (You want your high to be at some kind of support, so 2.97 was my number based on how well the high in december lined up, but since you want your high to be at support, we don't make 1.36 a 50% retracement from the red bars in September

Now that we've established our high. I adjust the low for the most recent move. I now pull the Fibonnacci's low to .28.

As you can see from the chart, the next target level is 1.63.

The trend in UIS is UP, which is why I sold 3/4 of my position and plan on buying back atleast half that when it retraces (if it fails at this level, it should retrace toward 1.36-1.21) Anywhere in this price range is a buy. 

So the high of the day was 1.62. It missed my target by .01.  I ended up selling at 1.60.

The point of Fibonacci isn't to predict a stocks behavior, rather it is to establish price support.

I've done the same thing with CAR, PIR, FAS, RF, FITB. The hod on CAR ended up being 2.05 by the end of the day. I sold at 1.96 because $2 didn't seem like it would've been taken out. Sure enough, 2.05, my original target, was hit within the last 30minutes of the trading day. 

This is just one way to use Fibonacci. If something isn't clear, feel free to ask a question. The more we go along, the more detailed and conise I'll be. For now, I only have a few hits a day so I doubt anybody pays attention.

Also note: Do not use Fibonacci as your only trading method. It's not an exact science and does in no way predict a stocks behavior. As I've already stated, it provides price support only. 

Price and Volume go a long way.