NEM (NEM/USD) Analysis December 23, 2017
DASH, BTC, Monero and all other p2p payment systems are on a down trend, the decline is especially noticeable in BTC but is it going to take down the smart economy builder called NEM? It doesn’t look so in the weekly chart until you zoom into the daily chart.
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In the weekly chart-this is where we define our trend, it looks bullish. In fact very bullish with those long, strong candlesticks hinting of extreme NEM demand. However, looking in closer and you notice that despite the combination of important indicators in stochastics-bullish and BB-bullish, it’s the candlestick characteristics and projections from Fibonacci extension levels that might hint of bearish pressure. I have talked enough of the long upper wicks and stuff but I want you to look at prices vis a vis the second extension level as projected by Fibonacci.
Even though our immediate support is at $0.58, bear pressure is strong and it won’t be surprising if they end up testing the first extension level or even clearing the 50% retracement level as drawn from last week’s high-lows. We wait and see!
Checking the daily chart and that double bar reversal pattern cannot escape our eyes. The cool thing about this is that it is accompanied by overbought stochastics which already has a sell signal printed.
As always, any kind of reversals is nothing unless there is some sort of a confirmation and that is why I will use this time frame and the 4HR chart.
Well, it isn’t a Picasso in the 4HR chart either. After that close below the middle BB and a follow through as we can see, I’m convinced buyers have a problem.
See, the stochastics are bearish and notice from where this reversal is happening? I really think this is just a natural retracement following the normal Fibonacci rules.
Reversal is from the 61.8% extension level after period of horizontal accumulation and bear pressure and as such, we expect price to react at between 38.2% and 61.8% Fibonacci retracement levels as drawn from last week’s high lows. That’s around $0.51 and $0.63