Yesterday I tried to apply Fibonacci Arc on NIFTY. I applied the Arc from the high point of 02-05-2008 to the low of 02-07-2008. However, Fibonacci Arc is not supposed to give any kind of buy/signal but still gives idea about the trend.
I was skeptical about the application of Fibonacci arc and other Fibonacci tools. But when I applied it and observed the arc , surprisingly it seemed to prvoide support and resistance lines.
(kindly click on the image for larger view)
Yesterday’s doji was on the boundary of the 100% circle of the Arc. T0day NIFTY traded outside the Arc and made new low. This movement has again confirmed the downtrend.