Fibonacci retracement uses several imp. key levels which are important for a stock.

These values are fixed and are given in percentages.. 23.6% , 38.2% , 50% and 61.8%.

When the price of a stock rises it is expected to face resistance at these levels.

When a stock falls these values provide support to it.

In a very stong bull or bear market the prices usually don't retrace more than 25% to 38.2%.

However , if the prices start breaking 61.8% to 75% then the main trend may be under threat.

Open the attachment to understand better.

This stock got an imp. support at 38.2% however it is now moving down and may find support at 23.6%

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