NEO (NEO/USD) Analysis December 11, 2017
In the weekly chart, NEO is really under pressure and from previous mentions, the main support line-previous resistance trend line is what traders should be watching.
From this week’s price action it is easy to note that even though the candlestick is bearish, some NEO bull pressure is developing. This happened after the trend line was touched and should this continue, then we shall surely see NEO recovering and bouncing back from main support trend line marked at $34.
The one thing to watch now in the weekly chart is the ability of price action to close above 38.2% which is a key Fibonacci retracement level. Note that even though $45 was tested, bears jumped in and drove prices lower but if there is a close above $36 today then bulls will be relieved.
In the daily chart, traders should be watching at price action not only from the $34 support line but also from the major support-previous resistance trend line that literally separates bulls and bear pressure. One thing traders should see is the behavior of the past candlesticks and especially December 7 at this major support line.
As highlighted, most of these candlesticks have long lower wick meaning presence of long pressure despite slowing bull momentum. Should there be series of higher highs and close above the 20 period MA then we can conclude another phase of bull pressure has begun.
What remains in the 4HR chart is just confirmation.
We are waiting for bulls to break and close above the resistance trend line as marked in the 4HR chart. If the current candlestick does that, long traders should take advantage of the already bullish stochastics to enter long and aim at $45 which is this week’s highs.
Furthermore, notice the higher lows and several pin bars along the support line indicating rejection of prices below $34 as a double bottoms develops.
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