It’s that time of the week where we can “fertilize” our accounts if we take hints of this week’s candlestick. It definitely looks ripe and it’s about time for inception. Yes, like the movie and as we plant bullish ideas into bears, let’s hope we become the better matadors lest we be gored.
As buyers look to work out and pare back losses, we should not forget how XLM slide found support at week ending December 31 highs. In case you have not zoomed out, prices reversed at $0.18 but pound to pound, this week’s candlestick has a long way to climb assuming last week’s highs are cleared.
It is also likely that the current candlestick might close above the upper BB and that in my opinion is a point of concern because the more prices remain over-extended-in such clear trends, we cannot risk trading shorts-unless of course there are strong indicators for that-or enter longs as we don’t want to ramp up at bad prices.
However, we leave that to time and price action.
In the daily chart, the reaction at the middle BB was profound and expected. Given the reliability of the middle BB, it was only a matter of time before prices snap back to the already defined trend.
As it was yesterday, conservative traders should be looking for a confirmation today. On the other hand swing traders should be looking for favorable entries in the 4HR chart.
If today’s candlestick end up bullish, then buyers can look for entry at our set buy triggers-at around $0.70 or above the 38.2% retracement level drawn from last week’s high low. The reason? Check out the daily chart and note that January 11 candlestick ended up almost as a doji and today might end up bullish because of these higher highs in the 4HR chart reversing from the 78.6% retracement level. It’s a clear morning star pattern.
As it is, swing buyers can enter and aim for $0.97 with stops below 61.8% Fibonacci level.