LiteCoin (LTC/USD) Analysis January 5, 2018

Sometimes it’s easy to accept pain that to fight and get bruised. That’s what LTC buyers should be doing given the technical set up of this trade especially in the weekly chart. It’s even relieving to admit. No good thing goes on forever.

 After that over-valuation on week ending December 24 and consequent confirmation, there was no better time that then to scale down or even exit long positions. The reason is simple: there is a stochastic sell signal turning from deep the overbought territory and even though this correction is expected to be short to medium term, I will be recommending shorts in the daily and 4HR charts every time a stochastic sell signal prints.

This week, I expect price erosion to continue and any close below $255 will be perfect. Our weekly time frame support comes at $150-the first Fibonacci extension level drawn from Q1 and 3 high lows.

After a series of lower lows and close below the 20 period MA on December 27, the path that had been directed by bears on December 22 was confirmed. Note that on that day, LTC crashed but end up recovering and actually closing above the middle BB.

Now, after sellers pushed the gas pedal on December 27, a new wave of bear pressure was signaled. In my opinion, the middle BB is our only significant resistance level and that is where I will be watching. Any price appreciation towards that line is a selling opportunity in the 4HR chart.

There is a stochastic sell signal turning from overbought stochastics and this is not enough. Check out $255 is acting as a reliable support. I recommend short positions in line with the over-valuation and consequent recalibration of prices in the weekly chart. Short and aim for $200 and $150 supports.