In this time frame, price action is oscillating within a tight $0.13 range and as long as prices continue consolidating as it has been the case, we can always remain out of this trade until we see a break through.
Overly, bulls seems to be in charge and the moment we see prices above our immediate resistance at $0.43, chances are the middle BB in the middle BB would be hit and even broken as Lumens prices recover.
I like the way last week’s candlestick closed and even if it is bearish and against our expectations, we can still see how buyers put on a good fight as they pushed prices higher and rejected any lows beyond $0.30.
We had previously mentioned that bears are still in charge mainly because of the strong bearish momentum not only from week ending February 3 bearish engulfing pattern but also from stochastics bear swings.
As you can see in the secondary chart, %k and %d are obviously diverging and moving from deep the overbought territory and albeit being lagging indicators, they still hold some significance. In our analysis, we shall factor last week’s close and relate it to week ending February 3 close.
Do we see some lower lows or rejection of bear pressure? Of course it’s the former that is visible as last week’s close was below week ending February 3 close. In my opinion, we should be looking for selling opportunities in lower time frames.
In the daily chart, we can see that after February 10, an evening star pattern was formed and with yesterday’s bear candlestick forming right at resistance level, we can only be bearish especially if today’s prices move lower.
As we mentioned before, as long as prices remain below the main resistance line-the middle BB, we remain bearish.
That looks likely to be the case now that we are seeing resistance at $0.38-or the 61.8% Fibonacci retracement level even before that flexible line is tested.