Sometimes it’s better to rely on candlestick characteristics than lagging technical indicators. In this cryptocurrency for example, we have a clear stochastic sell signal turning from a mildly overbought territory.
Yes indeed, over the past 3 weeks or so, ETC bulls have been put on the sword. Even after testing $21 and shedding close to 50% of its value, technical indicators point to more sell pressure. It is simply relaying what has been happening over the past 2 weeks or so because that is where it fetches its data from.
Well, from the chart, it looks like that $21 bear surge was a retest following a bullish candlestick break out on week ending December 17.
Of course if this is the case it’s a welcomed move especially from a bullish perspective and as I have emphasized before, fading a strong trend is always a heart sore unless maybe key levels have been broken. In this case, ETC prices NEVER closed below May 2017 highs as shown in the chart.
Now, in the daily chart, look at the conflicting stochastic signals.
The weekly point to sells while the daily chart is almost at the oversold territory with a stochastic buy signal likely to print especially if today’s candlestick end up bullish and hopefully close above the middle BB.
In the daily chart, the 20 period MA is a very strong resistance line. Also zoom out and realize that yesterday’s double bar reversal pattern happened at previous resistance turned support as highlighted.
Check out May’s and September’s highs is where January 1, 2018 reversals happened at.
In our entry chart, I shall place a simple trend line connecting December 23 and 27 highs. This trend line is our bull trigger and it would be important if buyers push and close above it today.
If they do that, then chances of $33 being hit and broken remains high.
That is important because not only will be ETC buyers breaking off from a short term consolidation after December 22 dip but it will signal bull trend resumption and a pump towards December 18 highs of $48.