Figure 1 China Energy rebounded off 38.2% level

In the figure above, China Energy began to pullback after forming a top from May 2007 to early June 2007. On 12^th June 2007, the stock tested the 38.2% level and subsequently rebounded off the level. Again, from 24^th to 25^th June 2007, the stock tested the 38.2% level a second time and rebounded off it. 38.2% in this case served as a very strong support for China Energy.

The following figure shows Tech Oil & Gas rebounding after hitting the 61.8% line.