In the weekly chart, it is obvious that bulls are in charge. From the syncing stochastic buy pressure and price action moving along the upper BB, it could be better for buyers. Also worth noting is the way prices have closed above the second Fibonacci extension level as shown in the chart.
Going forward, this level would be our expected spring board as buyers continue ramping up their long positions. Even if for example sellers jump in and this week candlestick ends up as a solid bull but with long upper wicks like last week’s then for us to continue buying on dips, prices must close above $22.
For continuity, it would be ideal for candlestick to band along the upper BB as this would signal buy pressure.
Buyers have been consistent and as such notice the banding along the upper BB and the divergence between the Bollinger bands? This is all buy pressure and with this, the 20 period MA should be the first level of support.
I have also pasted a Fibonacci extension level at November high low for us to get where potential support may lie and from the way it has panned out, $17 will be the secondary support level with immediate resistance lying above $25, a level which was hit on December 25.
If buyers continue with the pump, then of course short term buyers should aim for this week’s highs of $30.
In our entry chart, there is stochastic sell signal and a double tops forming along the resistance line at $25. Now here’s the thing, for buy pressure to continue we need prices to close above this resistance line otherwise if not, we wait until a stochastic buy signal forms.
This therefore places our potential support at around December 24 lows of $17 and if prices test this level then the $10 consolidation witnessed from December 19 would be completed.