It won’t take more than a glance to know that selling would be a disastrous idea unless maybe you know something that we don’t know. Of course after last week’s blast it would be suicide to initiate sells. I mean look at how buyers obliterated several resistance levels as defined by the Fibonacci extension tool.
Even though I don’t usually get excited with such humongous candlesticks, caution should be practiced because more often than not, these super long candlesticks are usually confirmed by a series of bear candlesticks and periods of consolidation even in the weekly chart.
That is why I prefer short but consistent candlesticks with bull or bear soldiers my bosom buddies. Now, we are seeing more of what I expected judging from the current candlestick: Lower lows and last week’s sell pressure spilling over.
Will the dip continue? That I don’t know, its price action that will pull the final plug. However, any dip below week ending December 31 will most likely see prices testing $0.30 which is the 4th Fibonacci extension level and our second level of support.
In the daily chart we are seeing a correction after December 4 close.
This was expected as prices needed some sort of equilibrium and this is where the middle BB band jumps in.
Of course, our first level of support won’t change but we have to observe at how prices react at the daily chart main support which happens to be the middle BB. The equalizer.
Even though prices are still a long way from $0.32, our sell trigger is at $0.5, or January 5 lows.
Notice that consolidation along the 50% retracement level?
Well, if prices manage to push and close above $0.72 as it aligns with the main trend then it is most likely that XLM path towards $1.0 and beyond will have been cleared. That’s my expectation today.