Irrespective of sentiment, I’m net short DASH and the reason for that is more technical than fundamental. While fundamental events cannot be prevented from happening, you can always figure out where prices might end up using technical indicators.
The only downside is that they lag but with regards to current set up-complete with a 3-bar reversal pattern called an evening star and a stochastic sell signal turning from deep the overbought territory-chances of lower lows couldn’t be better. Of course nothing is guaranteed but judging from similar historical set ups, the odds of a follow through is high.
From last week, we notice that were it for buyers to take over, then they needed to close above the second Fibonacci extension level at around $1075 but they didn’t. Instead prices moved lower and confirmed week ending December 24 over-valuation. For bear confirmation, then the same level still holds true: bears must close below $1075 otherwise we cancel this projection.
Even though bears pushed lower on December 30 and closed below the equalizer, buyers have been persistent and are driving prices back higher.
Notice that after that dip, bears did not confirm that move but instead buyers racked up their positions and before yesterday, resistance was found at the middle BB.
Going forward, this level is still important and should buyers maintain prices above it with this week ending as a bull then odds of the long term buy pressure picking up will be high.
In our entry chart, I have pasted a Fibonacci retracement tool between last week’s highs and lows. The result is clear. As it is, our immediate resistance zone-a level which was briefly tested yesterday-at $1200 is critical.
Besides the Fibonacci and resistance level, we can see the that DASH prices are moving along the upper BB and slowly inching towards $1200 with a bear pin bar formed in the midst of this steady trend.
Overly, we remain bears because of that stochastic sell signal in the weekly chart and we shall be looking for sell opportunities only.
We expect that to be found at around $1200 and 61.8% Fibonacci retracement level. It will be compounded especially if a stochastic sell signal prints anywhere at these level complete with a bearish engulfing pattern.