NEM (NEM/USD) Analysis December 15, 2017
It has been a successful week for NEM bulls judging from price action.
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For one, we can see that last week’s candlestick has been confirmed albeit the long upper wick we are seeing this week.
Then secondly, bull momentum remain unchanged.
We notice that after last week’s record surge that broke above the upper limit of the bullish wedge, the confirming candlestick is now aligned along the upper BB. That is in sync with what the stochastic momentum is hinting: bullish pressure.
Another thing that we have seen this week is how reliable Fibonacci retracement and extension tools are. Right from the reversal points at around 50%-61.8% levels, price action is now testing the 61.8% extension level which is our first take profit level.
With highs of $0.76 recorded last week, we expect this week candlestick to close above $0.58 and maybe even clear all-time highs in the coming session. That is dependent on if they overcome this bear pressure we have been seeing in the last couple of days.
Just like the in the weekly chart, bull pressure is evident.
Furthermore, December 8 high lows is not only significant technical wise but it also forms our short term support resistance.
Notice that after that surge and close above the upper BB, there was some over-valuation and the next day rather than confirming this bull pressure, a bear candlestick formed. Technically, that dip was not hints of bear pressure rather the reinstatement of equilibrium to counter the over-extension and late traders could buy on these dips.
NEM prices retraced and tested the main support line which also marked September highs as typical in a break out strategy. That was the “retest” that happened in quick succession following a “break out”. Currently, the trend is bullish as determined by December 8 bullish break out.
Additionally, there is a stochastic bull pressure which somehow justifies the upper BB banding.
Like the daily and weekly chart, we have some bullish pressure in our entry chart. We shall only be taking long positions as signaled by the stochastics.
Currently, price action is in accumulation after those lower highs relative to the upper BB with the 20 period MA acting as our first support level.
If bears break below that then we expect to find support at around $0.40 and $0.46 representing reversal zones at around 50%-61.8% Fibonacci retracement levels.
In the latter case, we shall wait until a stochastic buy signal forms around those levels before going long.
However, if there is close above the minor resistance line then we enter long as soon as the break out candlestick closes.