Fibonacci Fan lines take their name from their obvious fanlike appearance. They are generated by first drawing a trendline between two extreme points, i.e. trough and peak. Next, an "invisible" vertical line is drawn through the second extreme point. Three lines are then drawn from the first extreme point passing through the invisible vertical line with their slopes at the Fibonacci levels, usually 38.2%, 50.0% and 61.8%.
As the daily prices pass these three fans, one can make predictions about future price movements based upon the appearance of price resistance or support at these intersection points. When the prices hold at the fan line, there is support there. If they quickly move through the fan line, do not look for support until the next fan line is met.