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30

The Extreme Numbers: 2.24, 2.618,3.14

These numbers should be utilized when a stocks price action has exceeded the 1.618 projection. When the 1.618 has been "blown out," the price action is usually very volatile. Reversals off these numbers can be quite dramatic, quickly reversing after hitting an extreme projection. When you study these chart examples, it is important to look at the general area where the 1.618 was projected. In each instance, the stock possessed some type of a warning sign that continued in the predominant trend. However, when the stock reversed at an extreme projection, the price action formed significant price bars that indicated that the predominant trend was beginning to change. But, the most important aspect regarding these numbers is that they possess an extreme nature.

Bullish Extreme Numbers

bullish extreme numbers



When a stock has dechned past a 1.618, the extreme numbers are excellent areas to examine for potential reversal points. The 2.24 is probably the most prevalent of extreme bullish numbers, followed by the 2.618, and in rare situations, the 3.14. In fact, I believe the 3.14 is an ultimate point, where some degree of a reversal usually occurs.

If a stock is going to test these extreme projections, it usually will blowout the 1.618. Ifa stock declines in this area, the price action will usually be extreme and possess waming signs. However, a reversal off these extreme numbers is usually very sharp and quick.

I have included the following chart examples to demonstrate the extreme numbers. It is important to reference these charts and leam the basic framework of each projection.



becton-dickenson (bdx): daily

bullish 2.24

-4-0



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