Lisk (LSK/USD) Analysis November 9, 2017
If this week’s candlestick close as a bullish one, then we shall have a double bar reversal pattern at key support level. That should not be discounted. Generally, over the past three weeks or so, LSK price action has been mixed and slightly horizontal. We can easily identify our complementary support at $5 while strong resistance level stands at $6.2. There will be big bear statement if there is a turn around and USD bulls drive prices lower with a close below the main support trend line below $4. With the current price action set up, it looks unlikely and that is why we are inclined to only take long positions going forward in the lower time frames. Average momentum over the past few weeks has remained flat as shown by those flat %k and %d stochastic signals.
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Break above bull flag
According to our trading chart, LSKUSD just broke off from a clear bull flag. This is complemented by strong bullish momentum in the daily chart after that LSK Bull Run over the past few trading days. So, because of this simple fact, we shall only look to enter long trades in the 4HR chart.
In the entry chart you notice that before this break out, price action was at the 3rd section of the bull flag wedge. Support was solid at around $4.0 as marked by the main support trend line. This support level was tested after an inverted head and shoulder formation. As this set up dictates, the third leg move should equal the first leg price shift. To that effect, before a retest of main support trend line back at $4.8, our ideal take profit level should be at October 12 and 25 highs of $6. That will be key for short term LSK bulls.
If you zoom in closer, you realize that the current price action is testing support turned resistance. Within 2 months, the current price level has acted as strong support 3 times while October 19 and 31 are recent instances where $5.1 has capped further LSK appreciation. Nevertheless, our immediate bull target is $6.
Before you execute this trade, wait for a buy signal and a retest of main resistance trend line to be printed. Otherwise, place a buy stop pending order above $5.5 though it won’t provide a good risk reward ratio given our preferred take profit.