LiteCoin (LTC/USD) Analysis November 8, 2017

Litecoin analysis

LiteCoin (LTC/USD) Analysis November 8, 2017

Before proceeding with this crypto pair, we have to look at historical price action. It is apparent that even if-and there is- a correction from LTC all times highs, price action will react at certain significant levels. To determine these potential and immediate reaction levels, we have to refer to the daily chart. The weekly chart in this case will guide us from the top-down approach. As it is, bears are in charge despite the recent higher highs. Furthermore, the 20 period MA is a key reaction zone in the weekly chart as shown in the last 8 weeks.

So, inspecting the daily chart and you notice two things. First off, price action is playing inside a break out pattern. This break out pattern begun after September 14 with a follow through retest of resistance trend line on October 15. Thereafter, USD bulls drove prices lower. Secondly, the retests at $65 might complete a head and shoulder pattern if the neck line at $57 stands. For that to happen, July 4 and September 28 resistance line-also acting as a neck line-must cap LTC appreciation. There is a buy signal in place after a double bar reversal pattern on November 2 and above average bull volumes. Any further LTC rally entirely depends of if the 20 period MA and $57 resistance line will hold.

This is what we are going to do in the 4HR chart. As mentioned above, $57 is a strong resistance line. Notice how it has been retested 5 times in the last 2 months alone after that break below support now resistance on September 14. Before this week, LTCUSD was trending within a descending channel as shown in the chart. However, following a buy signal and a morning star formation on November 6, LTC is actually inching higher towards $57. Also, check out that double bar reversal pattern at the 20 period MA when USD bulls tried to drive prices lower despite stochastics turning from oversold territory.

My thoughts

I would advise LTC bulls to scalp with small lots. Long entry will happen after the close of this candlestick at around $55. Stop losses should be below $54.20 at support previous resistance trend line and 20 period MA. Short term bull target will be placed at October 20 highs of $61.

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