DASH (DASH/USD) Analysis November 9, 2017
Before concluding the general DASH trend, we have to look at historical price action correction for validation. It is obvious that the 20 period MA or the middle BB is a strong support line in the weekly chart. Over a 10 month period, DASH prices has never closed below it.
Now, in the past two quarters, there have been two quick corrections. The first one took place between March and April 2017 following that price action overextension and close above the upper BB. The second one happened between June and July where again price corrected after a close above the upper BB. Now, the most recent correction in this steep trend is still in process and begun on August when DASH touched record highs of $411.
In all these corrections two things are clear for all chartist.
First, The 20 period MA is a rock solid support line. Secondly, every correction wipes more than 50% of DASH value. Check out $122 to $42, $238 to $117 and then the latest $411 to $234. You also note that every leg up is accompanied by a stochastics buy signal as marked in the chart. Overly, by close of last week’s candlestick, DASH had lost 30% of its value after August retracement. It’s clear once you paste Fibonacci retracement tools from $411-$5 Hi-Los.
In the 4HR chart, DASH has been oscillating within a descending channel in the last 30 days. Well, there was a break above resistance trend line at $280 on November 6 when price surged $12. Since this was above the normal 4HR candlestick range, a correction back towards the main resistance line at $280 was swift.
This move concluded a break out strategy and as the plan dictates, the resulting trend direction is determined by the direction of the original break out which in this case was bullish. This means, we only take long positions in this time frame every time there is a stochastic buy signal at the overbought territory. That way, we shall be trading as per DASH previous price action behavior following a 50% or more devaluation. Long traders will also be in sync with the recent break out strategy plan in the 4HR chart. All these combinations make long entries low risk and high reward set ups.
Therefore, the current DASH price set up in the 4HR chart provides a perfect opportunity to trade in two ways. One of them is to exercise patience and wait for a buy signal and the second is to place a pending buy stop order above the most recent highs at $310.