Like any other token or security, rallies are dependent and anchored on demand of the underlying product or service. For NEO to rally, there should be a surge of demand leading to a break above resistance trend line at around $34.
Bulls attempted that last week when prices rose $14 and tested $38 but then USD bulls jumped in and pushed prices back. Eventually, last week closed with a long upper wick signaling bear pressure. Stochastics are in sync with this bear momentum and are still trending lower with a sell signal in place.
In the daily chart, the weekly sell pressure is clear. As we can easily note, any close above $40 after that NEO bull on November 8 and 9 would have nullified the current bear break out strategy that begun after the break out on November 18. After November 9, alt coin price action failed to close above the main resistance line and a bear engulfing two bar reversal pattern was formed after an upswing of USD bulls.
This pushed price action back to the $10 range which begun on October 12 and is marked by those clear resistance and support lines at $24 and $34. Furthermore, price action has closed below the all important 20 period MA in the daily chart. Notice that prior to that one-time break above on November 8, this flexible resistance line had capped bulls for 28 straight days after October 12.
Trading this pair is simple, since there is pronounced bear pressure combination in the weekly and daily charts, we shall only look to sell in the 4HR chart. However, it’s the beginning of the week and look at how price action is rejecting any close below $24 main support level.
Notice the bullish pin bars in the previous 5 sessions with over sold stochastics and a buy signal in place happening at the upper limit of the minor descending channel. This confluence of support means the current price level is important for NEO.
The strategy is this: Despite NEO moving inside a bear break out strategy, you can set a buy stop with small lots at $28 in the 4HR chart and aim at resistance line at around $34 since there is a buy signal present. Buyers are advised to hold in case that buy stop is triggered until a sell signal accompanied by a strong bear candle is printed.