NEO (NEO/USD) Analysis November 29, 2017

NEO/USD analysis

NEO (NEO/USD) Analysis November 29, 2017

As evident in our entry chart, price action in the 4HR chart has been slow and restricted to a $4 range inside a minor bull flag. NEO trades should only look to initiate long positions unless otherwise.

For this to happen there should be a bull candlestick closing strongly above the minor resistance trend line of the current bull flag. The second scenario is if bears manage to close below the minor support trend line but a reversal happens at around our support zone at around $34. This reversal should be accompanied by a stochastic buy signal and a bullish engulfing candlestick.

After that flash rally on week ending November 19, price action closed above the main resistance trend line and the wedge in the weekly chart. While we expected that initial rally to be confirmed last week, USD bulls shifted gears and pushed prices lower but then the most important thing is the price level at which it closed and the candlestick characteristic itself.

 One thing is clear, the long lower wick by itself if an indication of strong NEO bull pressure and there is expectation that this bull momentum shall be spilled over to this week’s price action. At the moment, the stochastic buy signal in place means bulls are aiming at immediate resistance line at $45.

Secondly, we shall watch out on how this week’s candlestick will close. If it turns out bullish, then we can be rest assured that highs of $58 will be retested in the coming few sessions as per Fibonacci retracement and reversal guidelines.

In the daily chart, the trend is up as you noted. There is a stochastic buy signal in place after NEO prices bounced from $34 support line. Additionally, since prices are oscillating within the upper half of the larger consolidation range between $45 and $24, we expect NEO bulls to continue with their higher highs towards $45 now that there was strong rejection below $34.

The 20 period MA and price levels around $34 shall be our support line but we shall emphasis the importance of the 20 period MA. Note that it has only being retested two times after that wedge break above on November 17.

 

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