By the end of November 2017, if you had bought LSK coins, you would have been sweating bullets. Yes, the dip was so pronounced and it looked like a bear reversal was in play after that double bar reversal pattern formed right in the middle of a strong uptrend.
Look, you had all the reasons to buy. There was a stochastic buy signal and price action had blasted the minor resistance at $6.5. Lisk was also bouncing from the main support trend line at around $4 which also happened be the 50% Fibonacci retracement level. Good confluence right? Yes it was.
Despite that minor blip, LSK prices are recovering and should continue to turn higher now that last week’s doji candlestick didn’t confirm November 26 candlestick. As long as prices are above $6.5, sustained bull pressure could push prices towards 61.8% Fibonacci extension level at $13.5. That possibility could be further amplified especially if this week’s close is above last week’s highs marked at $9.
In the daily chart, chances of LSK higher highs remain pronounced and this just technical. Notice the reversal from the Fibonacci significant levels of 61.8% complete with long lower wicks after a bear divergence pattern has formed between November 14 and 21. Current prices are also above the 20 period MA and stochastics are bullish with a buy signal in place.
From weekly chart price action, we shall be taking long positions only. As such we shall wait until a buy signal is printed or price action breaks and clove above the minor resistance trend line. The 20 period MA and $8.5 price level should act as immediate support going forward.
If LSK corrects further, then the next support line should be at $6.5 which is also November 30 lows and the lower limit of this descending channel. In latter scenario, traders should wait until stochastics prints a buy signal and enter long.