Iota (IOT/USD) Analysis December 4, 2017

Iota anlaysis

Iota (IOT/USD) Analysis December 4, 2017

After receiving a stamp of approval through corporate endorsement and collaboration, it’s in our view that IOTA will end up closing above $1.3 by the end of the week. If it does, then we can be sure that there is some level of bull pressure that still exist.

Given the nature of stochastics and the alignment of price action along the upper BB, a little bit of IOTA upside won’t do any harm in the coming sessions. After all, %k and %d of the stochastics are still diverging with a clear buy signal. Trading against the trend will be counter-intuitive and despite the minor sell pressure in the past 48 hours or so, the weekly trend should take precedence.

If USD bulls continue with their sell pressure, we expect to see some reaction at $1.1 and $0.98 as highlighted in the chart. These are our level of strong support which if price breaks and close below would signal change of trend atleast in the short to medium term.

In the daily chart we can see that over-extension on November 28. That is when price action close above the upper BB and the next day prices trickled lower to reflect that over-valuation.

After that correction, you notice two things. The first is that price action did correct but on two different occasions, the first support line at $1.1 was tested and price action bounced off it on November 29 and 30. This was important because $1.1 is August highs.  

Then secondly, a stochastic buy signal was printed to signal trend continuation as defined in the weekly chart.

Our trade strategy in the 4HR chart will be easy and largely dependent on today’s close. As mentioned earlier. It is imperative for price action to close above $1.3 and for that to happen, we must see a strong close above the 20 period MA in the 4HR chart. This line has been a reliable support line in the last 4 days.

Should prices fail to close above it and continue with the bearish trend triggered by that over-valuation on November 29, then we shall wait to see how prices react between $0.98 and $1.1.

Otherwise we are bullish as per the weekly chart trend and as much as possible trying to take advantage of those buy stochastic signal common across all the three time frames.

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