Last week was particularly important for LTC bulls because of that confirmatory bullish candlestick after that bounce from the trend defining 20 period MA.
As noted, the 20 Period MA and candlestick patterns have all combined to ensure that LTC prices continue appreciating. By closing at $71 and testing highs of $73, last week’s candlestick managed to break and close above the most recent highs of $69 last recorded on week ending October 9. This was important mainly from a Fibonacci interpretation point.
By LTC prices closing at $71, it meant that prices corrected 60% after bouncing back from the 20 period MA with a long lower wick as shown by week ending September 11 candlestick. With current LTC price action, prices have recovered 100% following that single $38 drop by week ending September 11. Besides that, notice its Hi-Lo acted as upper and lower limits for LTC prices for 9 good weeks. Because there is a stochastics buy signal, it is likely that that LTC demand shall continue to increase in the coming weeks.
In the daily chart, the resistance trend line of our minor wedge was broken and it actually acted as support on November 17 before LTC continued with its appreciation. However, the long term resistance-previous support trend line will momentarily act as our price ceiling.
Remember that before that break below on September 14, this trend line defined price action which was bullish then. The bear break out was definitely definitive and meant that there was a recalibration of prices.
From price action behavior, we can tell that we had a retest on October 16. It is imperative for LTC bulls to wait and see how prices will end up today lest they buy at tops. If prices bounce back then this trend line will act as a relevant price cap and complete another reversal from this resistance trend line.
Despite the minor bear divergence last week, LTC price action managed to close above the $12 horizontal channel after sustained demand. Our next bull target is $74 which is another level of support and resistance last tested on September 2 and 8.
If there is a reaction at or near that level with a bear candle and a stochastic sell signal, then LTC bears should look to sell because as we have seen in the daily chart, those prices will be at the main resistance-previous support trend line. Reversal from that level will also be a confirmation of another tops and bounce from resistance trend line.