How are Fibonacci retracements used in stock market analysis? Option: To predict the exact future price of a stock, To identify potential levels of support and resistance, To calculate a company's intrinsic value, To determine the best time to buy or sell options

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How are Fibonacci retracements used in stock market analysis?

To predict the exact future price of a stock

To identify potential levels of support and resistance

To calculate a company's intrinsic value

To determine the best time to buy or sell options

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What is the first step in applying Fibonacci retracements to a stock chart?

Draw trendlines to identify support and resistance

Identify the most recent significant peak and trough

Apply technical indicators like moving averages

Calculate the average trading volume

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What are the commonly used Fibonacci retracement levels?

23.6%, 38.2%, 61.8%

25%, 50%, 75%

33.3%, 66.6%, 100%

10%, 20%, 30%

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Describe the process of identifying support and resistance levels on a price chart.

Look for price points where the stock has historically reversed or stalled, and connect them with horizontal lines

Focus solely on recent price movements to determine S&R

Rely on intuition and guesswork to estimate S&R zones

Use complex algorithms and software to automatically detect S&R levels

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Why is analyzing the 52-week high and low values of a stock important for intraday trading?

"To assess the company's overall financial health"

"To determine the company's long-term growth potential"

"To identify potential entry and exit points based on historical price fluctuations"

"To predict future dividend payouts"

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What is the primary purpose of support and resistance (S&R) levels in technical analysis?

To predict future market trends with certainty

To eliminate market risk

To guarantee profitable trades

To identify potential price points where buying or selling pressure may increase