Fibonacci retracement on PSX charts, with DGKC

A Fibonacci retracement (fibonacci retracement kaise lagayen) divides the distance between a swing low and a swing high into fixed fractions: 23.6%, 38.2%, 50%, 61.8% and 78.6%. After a rise, each level is the high minus that fraction of the swing. A real example: DGKC’s daily low was Rs 145.10 on 30 March 2026 and its daily high was Rs 237.49 on 6 July 2026. The swing is Rs 92.39, so the 50% level is Rs 191.30 and the 61.8% level is Rs 180.39. It is a measuring convention. This post found no evidence that prices turn at these ratios more than at other ratios, and the swing you choose changes every level.

What is a Fibonacci retracement?

A retracement measures how much of an earlier move the price has given back. If a share rises from 145.10 to 237.49 and then falls to 191.30, it has given back half of the rise. The tool draws horizontal lines at chosen fractions of that move, so you can read at a glance which fraction the price has reached.

The formula for a rise is: level = high − ratio × (high − low). For a fall, measure up from the low: level = low + ratio × (high − low). On a normal price scale that is all the arithmetic there is. You pick two prices, and the ratios divide the gap.

Where do 23.6, 38.2, 50, 61.8 and 78.6 come from?

Three of the ratios come from the Fibonacci sequence, in which each number is the sum of the two before it: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144. Divide a number by the next one and the result approaches 0.618. StockCharts’ reference describes the same three: a number divided by the next higher one approximates 0.618, by one two places higher 0.382, and by one three places higher 0.236. Here is the check, using the sequence above:

Ratio	Where it comes from	Check
23.6%	A number divided by the one three places higher	21 ÷ 89 = 0.2360
38.2%	A number divided by the one two places higher	34 ÷ 89 = 0.3820
50%	Not a Fibonacci number: the old idea that a market often retraces half its move	1 ÷ 2 = 0.5
61.8%	A number divided by the next one	55 ÷ 89 = 0.6180
78.6%	The square root of 0.618, not a ratio in the sequence	√0.618 = 0.7861

StockCharts says the 50% level “is not based on a Fibonacci number” and comes from Dow Theory’s idea that the averages often retrace half of their prior move. The 78.6% level is the square root of 0.618. The ratios are therefore a mix: three from a number sequence, one from a market habit, one from a root. They are agreed conventions, not laws of nature.

How do you choose the swing on a PSX chart?

Choose the swing before you look at the levels. A swing is two points: a low and a high that stand out from the bars around them. For a rise, use the low first and the high after it. The usual choice is the largest recent move on the timeframe you read, using daily highs and lows.

The choice matters more than the ratios. DGKC shows it. From the daily bars, the lowest low from March to July 2026 was Rs 145.10 on 30 March, and the highest high after it was Rs 237.49 on 6 July. But the 52-week high was Rs 256.00, on 19 December 2025. A swing from that high down to the same March low is Rs 110.90 long, and its 50% level is Rs 200.55, not Rs 191.30. Both swings are fair choices. They give two different ladders on the same chart.

On a log price scale, the levels sit in a different place. SuperX Charts takes the levels in log space on a log chart, where the 50% line is the geometric midpoint. For the DGKC swing, the 50% level would be Rs 185.63 on a log scale, against Rs 191.30 on a normal scale. Check which scale you read.

What are the DGKC levels for the March to July 2026 swing?

The data is the one-year daily series of DGKC (D.G. Khan Cement Company Limited) from SuperX’s public API: 249 bars from 17 October 2025 to 16 October 2026. I chose DGKC after scanning the 100 KSE-100 constituents for a rise of at least 25% followed by a partial fall, with no bonus issue and no cash dividend between the two points. DGKC’s next ex-dividend date, for Re 1 per share, is 19 October 2026, after the data ends (unconfirmed as of the snapshot of 9 October 2026).

The swing is the low of Rs 145.10 on 30 March 2026 and the high of Rs 237.49 on 6 July 2026. It spans 65 daily bars from low to high and is Rs 92.39 in size. For a rise, each level is Rs 237.49 minus the ratio times Rs 92.39.

Ratio	Calculation	Level (Rs)	Sessions after 6 July whose range included it
0%	237.49 − 0	237.49	n/a (the high)
23.6%	237.49 − 0.236 × 92.39	215.69	11
38.2%	237.49 − 0.382 × 92.39	202.20	4
50%	237.49 − 0.5 × 92.39	191.30	8
61.8%	237.49 − 0.618 × 92.39	180.39	1
78.6%	237.49 − 0.786 × 92.39	164.87	0
100%	237.49 − 92.39	145.10	n/a (the low)

The last column counts sessions between 7 July and 16 October 2026 (72 sessions) whose low-to-high range contained the level. DGKC closed at Rs 182.00 on 16 October 2026, which is a 60.1% retracement of the swing. On 14 October its low was Rs 179.15, a little below the 61.8% level. The DGKC share page shows the same close and says it is down 24.6% over one year.

Do prices respect Fibonacci levels?

The column above is a small test, and it gives a plain answer. Over the same 72 sessions I also counted 81 levels, one at each 1% from 10% to 90% of the swing. They were touched on average 5.1 times. The 62 of them more than two percentage points from any Fibonacci ratio were touched 4.9 times on average. The five Fibonacci levels were touched 11, 4, 8, 1 and 0 times. Two of the five were above that 4.9 average and three were below it. One share and one swing prove nothing either way. The test shows only how little a single chart can say.

Published research is no stronger. A 2021 paper in Expert Systems with Applications, on automatic identification of Fibonacci retracements in three equity markets, found a positive relation between zones around levels and the chance of a price bounce. But it found that price behaviour in Fibonacci and non-Fibonacci zones did not differ statistically (taken from the abstract as summarised in a search listing; the full paper was not read). StockCharts’ own page says the levels “are not hard reversal points” and calls them alert zones.

So, plainly: there is no evidence base, in what was read for this post, that prices respect Fibonacci ratios more than other ratios. No study of PSX was found. Use the tool as a ruler that divides a range into agreed fractions, and as a common language, because many people draw the same levels.

How do I draw a Fibonacci retracement in SuperX Charts?

SuperX Charts is free, with no account. The drawing guide lists all 72 drawing tools. The tool is called Fibonacci retracement, in the Fibonacci family on the drawing rail.

1. Open DGKC on a one-year daily chart.
2. Click the Fibonacci family button, or press Alt+F.
3. Click twice on the chart. The tool puts 0% at the first click and 100% at the second, so after a rise click the high first and the low second. Or click low then high and tick Reverse in Settings, under Inputs.
4. Read the levels. The default table has seven: 0, 23.6, 38.2, 50, 61.8, 78.6 and 100%. A label can carry the ratio, the price, both or neither (Show levels, Show prices).
5. Select the drawing and click Settings. The Levels table in Inputs lets you show, hide, add or remove a ratio. Extend lines right runs the lines on past the swing.
6. In Coordinates, type the exact prices and dates of the two points. The price steps by the exchange’s tick, and the date picker offers trading days only.
7. To compare a log chart, change the scale to log. The levels are recomputed in log space.

Pro also has Auto draw, whose Fibonacci on the last swing tool draws a retracement on the last complete swing in view: a turn of at least 2 times the 14-day average daily range. It draws on request, and its label says it is an automatic drawing from past prices and not financial advice.

What are the limits of this measure?

It needs two chosen points, so two people can draw two ladders on one chart, as DGKC showed. It reads highs and lows, which one odd trade can move. It says nothing about the cause of a rise or a fall. A cash dividend lowers the price on the ex-date, and the daily bars are not adjusted for cash dividends, so a swing that spans an ex-date mixes a payout with a price move. Bonus shares and splits are adjusted. Check the ex-dates on the DGKC dividend page before you pick a swing.

For more context, the DGKC chart page on this site plots its closes and the DGKC stock page shows its fundamentals. How to read the KSE-100 chart applies the same method to the index, and support and resistance on a PSX chart covers levels drawn from the price history alone. Another cement share, LUCK, closed at Rs 400.56 on 16 October 2026, and the MCB page closed at Rs 374.53.

Frequently asked questions

What are the Fibonacci retracement levels?

The common levels are 23.6%, 38.2%, 50%, 61.8% and 78.6% of a swing. The tool also shows 0% and 100%, which are the two ends of the swing.

How do you calculate Fibonacci retracement levels?

For a rise, subtract the ratio times the swing from the high. For DGKC, 237.49 − 0.618 × (237.49 − 145.10) = Rs 180.39, using the daily high of 6 July 2026 and the daily low of 30 March 2026.

Where does 61.8% come from?

It is the limit of a Fibonacci number divided by the next one. For example, 55 ÷ 89 = 0.6180. The 50% level is not a Fibonacci number, and 78.6% is the square root of 0.618.

Do prices turn at Fibonacci levels?

This post found no evidence that they turn there more than at other ratios. A study of three equity markets found no statistical difference between Fibonacci and non-Fibonacci zones.

How do I draw a Fibonacci retracement in SuperX Charts?

Choose Fibonacci retracement in the Fibonacci family or press Alt+F. Click the swing high, then the swing low, and read the seven default levels.

Education, not investment advice.