At the moment, NEO prices are soaring and why not? Prices are “walling” if you may like. The ride up has been smooth with no major hiccups. Of course, the results are visible for everyone. That clearance of the second Fibonacci extension level at $97 hints of more potential for an upside given the way buyers are raring to go.
From the secondary chart, it is clear that buy pressure is high meaning long traders should be looking-and waiting to buy on every dip. Of course that would be the case if there is a retracement towards key support levels in lower time frame charts.
In the weekly chart, our immediate support levels will be this week’s lows at around $70 and the lagging middle BB. For weekly chart entries, we shall rely on candlestick characteristics because of the rocketing prices and the accompanying volatility.
These two often have a history of stretching technical indicators and temporarily rendering them useless until after prices begin trending within their average ranges.
In the daily chart, NEO prices continue to clear several resistance levels following that bull break out that was triggered in the weekly chart. After NEO buyers closed above $85 on January 2, all that was needed was a confirmation and it did happen yesterday.
Besides the break out, note how the daily candlesticks are now banding along the upper BB. In the weekly chart, we need prices to push-and it would be ideal if they close above $97.
That cannot happen if bears jump in now. Remember $97 is also a resistance level where sellers can pour cold water on this rally at any time and all that is needed is a sustained close above it for buy pressure to be reassured.
Our entry chart hints of sell pressure now that a stochastic sell signal has been printed. Besides that, a double bar bear reversal pattern has been printed and should it be confirmed with sellers push prices below $97, then buyers should wait until a buy signal is printed. In that regard, support can be found at December 18 highs of $85 if the first layer of support marked by the middle BB is broken.
I have also drawn a Fibonacci extension line-an indispensable tool in my opinion, between last week’s high lows and its levels show that NEO prices have already cleared the 61.8% level. Often, when this level is cleared, prices tend to correct. If this is the case, then last week’s highs may be tested. Therefore, when we combine these two, our potential reversal zone is between $77 and $85.
If prices bounce off from either level, then buyers may aim at the second extension line at $123.