NEM (NEM/USD) Analysis December 12, 2017

Good times for NEM even after what appeared to be the end of the world following that dip to $0.12. It was tough and within 24HRs, NEM holders experienced wild swings and for those who liquidated their positions on December 7, they missed out on a strong uptrend.

This knee jerk reaction came after NEM announced a new partnership with WeChat, the Chinese social media company and the response was taken positively by investors.

Before this move up, we were net bullish with modest take profit at $0.30 which by then was a strong resistance level as shown in the 4HR chart. This of course was blasted after prices exploded to $0.678 within 8 hours.

In the weekly chart, the new found volatility saw price action breaking and closing above the main resistance trend line and the bull wedge in the weekly chart. This upswing came less than 12 hours after the main support trend line at around $0.12 was tested. Even at current prices, there is hint of buy pressure since we have a stochastic buy signal in place and it is increasingly likely that NEM demand will force the consequent bullish candlesticks to align themselves along the upper BB.  This will definitely be positive for NEM holders as they will rip from capital gains of this token.

If that happens, chances of our ideal take profit level at $0.58 being hit is high. Don’t forget that prices reversed from around the 50%-61.8% Fibonacci retracement levels and as dictated by Fibonacci rules, bulls might end up testing price levels around the 50% and 61.8% extension levels.

In the daily chart, the sudden spike caused an over extension and as expected a correction happened the following day with a whole bear candlestick closing above the upper BB. To complement this, there is a stochastic sell signal in place and yesterday’s bear candlestick confirmed December 9 over extension.

 Should this short term bear trend continue then better opportunities to buy on dips is likely to be found in lower time frames like the 4HR chart since the overall trend is bullish in the weekly chart.

Our entry chart is bullish with NEM buyers keeping prices above the 20 period MA.

 Already we have a stochastic buy signal and even though prices in the daily chart look overstretched, there are better opportunities to buy at current prices with stop losses below today’s lows of $0.36

If USD bulls take charge as hinted in the daily chart then we expect a strong break and close below the middle BB. In that case, the first level of support will be found at previous TP level marked at $0.30