NEO intentions were clear last week.
At the beginning, it appeared to be a slow week. Hours later, NEO prices exploded after that brief close above $36 which marked out 38.2% Fibonacci retracement level. If it continues this way, it is likely that the first take profit level as projected by the Fibonacci extension level at around 498 will be hit.
It is also important to highlight last week’s strong close above the August and November highs at $58 and $49 respectively and what it means going forward. This is a two -level break and close above resistance lines in the weekly chart and we might see NEO slowing down and testing August highs of $58.
Of course that should be welcomed. With every lower low, those who didn’t buy from $34 can enter the bull train and aim for our ultimate take profit level at $98. The objective will be faster if NEO bull candlestick band along the upper BB, complementing the bullish stochastics as shown in the secondary chart.
In the daily chart, look at the relative distance between the 20 period MA and the lower/upper bands.
There is an obvious divergence meaning high volatility after an extended period of a BB squeeze from October.
Of course the longer the BB squeeze, the stronger the break out and we saw that on December 17 when NEO’s daily range more than tripled gaining $20.
Additionally, we can see bull candlestick banding along the upper BB which is in tandem with the stochastic bull momentum just like in the weekly chart.
Trading from our entry chart will be simple.
Already, the weekly chart has defined out trend so we only take long positions. As the stochastic shows, we expect bearish momentum to kick in anytime to correct that over-extension in the weekly chart plus there a bit of sell pressure given the long upper wicks which is also clear in the 4HR chart.
If that happens, we have a strong region of support represented by the main support line at around $60 with the 20 period MA being our second layer of support. That is where we expect to go long especially if a bull candlestick and/or a stochastic buy signal is printed.