NEO (NEO/USD) Analysis December 18, 2017
We shall reiterate that despite the bearish pressure evident in the last two weeks, NEO remains bullish. Not only is it technically undervalued as compared to similar platforms but politically, NEO is a sort of state machinery, a technology stamp that the Chinese government want to succeed.
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As it is, we shall consider any dip as a buying opportunity going forward. In the weekly chart for example, we were keenly watching price action and the behavior of bulls at around the 38.2% Fibonacci retracement level.
As we can see, prices around $40 in lower time frame was area of immense resistance not only this week but for the better part of November safe the day bulls tested $45. This week close above 38.2% retracement level marked by signal bulls. NEO prices not only surged but managed to close above $45 main resistance line after that reversal from the main support trend line marking the upper limit of the bull wedge.
Other than that, the 20 period MA is still a significant support and because prices are still oscillating above it, the immediate bull target should be August highs of $58.
Like the weekly chart, bulls are in charge.
After 28 days of horizontal consolidation, bulls eventually broke and closed above the upper limit of the channel at $45. This is a classic bull break out, we therefore expect some sort of “retest” before price action continues trending as per the direction of the break out.
Apart from this, look at how daily candlesticks are banding along the upper BB from December 13. This means that prior to December 14 break out NEO had developed enough impetus to break above this one month resistance line.
After all, stochastics is bullish with diverging %k and %d signaling strong NEO demand.
In our entry chart, NEO prices are correcting with a stochastic sell signal in place.
Fact is, when NEO surged towards $60, there was some over-extension to the upside and a bear divergence developed.
This is normal.
It also means that this correction is another buying opportunity. We shall be watching if this current candlestick closes below the middle BB. If instead there is a reversal from $45, buyers should add their long exposure.