LiteCoin (LTC/USD) Analysis January 9, 2018
Unfortunately, stochastics buy and sell signals can sometimes be misleading and there’s nothing that can be done since all technical indicators are after all lagging. Any lag with cryptocurrencies and you can end up losing a fortune.
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Consider last week’s bull candlestick printing with a strong stochastics sell signal turning from the overbought territory. Even though it is being printed in a strong uptrend, any lower low is really a buying opportunity as we seek to realign trades with the prevailing trend which in this case is bullish.
From the set up, it appears that LTC buyers are pushing higher and as long as they stay aligned to the upper BB-our volatility meter, we should be looking for long entries in the lower time frames.
Because of the buy pressure, the 2nd Fibonacci extension level at $255 is our support line and any close above $300 means a ride towards $420 is on the cards.
See that huge bull candlestick that broke and closed above the middle BB in the daily chart? Relative to other candlestick on this time frame, its ADR was higher and therefore a breakout candlestick on lower time frame.
Typically, these kinds of trades often tend to reverse and retest the previous resistance now support. Such corrections are buying opportunities and should it happen, all we have to do is fine tuning entries in the 4HR chart.
You see what I’m talking about on our entry chart? Yes, those lower lows following a break out that begun on January 6th.
Break out trades are usually made of phases: the main break out that happened on January 6 and now the second phase which is the retest of the break out. It will be confirmed if there is a reversal from current prices-$20 from $255 previous resistance now support.
If the current bull candlestick is confirmed, then I recommend long entries with immediate targets at $375 and $400.