Retracement
A price movement developing in the opposite direction of the prevailing trend is called a retracement, be it an advance or a decline.
There are two common types of retracements technical analysts use to determine price objectives: percentage and Fibonacci retracements. The first of these predictable percentages of market price movements are the 33, 50 and 67 percent, accordingly to the Dow Theory. A 50 percent retracement is the most important according to Gann and it's also part of the Fibonacci retracements. Fibonacci ratios produce retracements of 61.8, 38.2 and 50 percent, among other percentages of secondary importance.
