For today's chart we've chosen to take a look at ITT Corporation (NYSE:ITT) because it is testing the support of a long-term trendline. Technically speaking, this stock is in an interesting position because a close below $55 will signal a shift in the prolonged uptrend. We'd expect bearish traders to set their short-term targets near $50 because this equals the 38.2% Fibonacci retracement level. Conversely, bullish traders will watch for a bounce off the trendline and a move toward $59.
This chart is a good example of how the Fibonacci retracement levels act as support and resistance and how they can influence the price. Notice how the role of each level changed from resistance into support once the bulls were able to send the price above each level. If the trend shifts lower, we'd expect to see the same relationship and would watch for the retracement levels to become barriers to moves higher.