Despite the obvious bear pressure after week ending January 21 close, last week’s response from buyers was impressive. In fact judging price action from candlestick characteristics, the buy pressure-marked by long lower wicks- following that deep bearish engulfing candlestick spilled over and pushed prices higher.
Even if prices action is within our clear boundaries as marked by the Fibonacci extension lines, DASH prices are likely to head to the dregs at around the 1st Fibonacci extension levels and the middle BB which as we have mentioned on numerous occasions is our main support.
Anyhow, from previous analysis, it could be ideal if prices closed above $900 for buyers to be in charge but that didn’t happen irrespective of the long lower wicks-bull pressure-by last week’s close.
In the daily chart, the middle BB will act as our immediate resistance line. The question that we should be asking ourselves is if this flexible resistance will hold.
Realize that the double bar reversal pattern which formed following DASH undervaluation on January 16 and 17 was confirmed following that 3-bar bull reversal pattern between January 26 and 28.
Even though yesterday’s candlestick was bearish, we can be confident of sustained buy pressure provided prices don’t close below the 61.8% Fibonacci retracement level and January 16 lows in the coming sessions.
If it does, then 78.6% retracement level at $525 will quickly be our bear target.
The accumulation and bounce along the 61.8% Fibonacci retracement line is a boring consolidation and a possible BB squeeze in our entry chart.
If support is strong in the daily chart, prices will bounce off the minor support trend line in our entry chart and perhaps even close above the upper limit and resistance trend line of this descending wedge. After all, price action is right at the final third of the triangle and this is where prices often explode.
Bears are generally in charge but considering last week’s buy pressure, it will be good practice for us to wait as trend direction is defined.