Bulls briefly reverse course but are scared back on course.
The Bulls took a 1,000 dollar plummet suddenly last night...likely from multiple people profit taking after a prolonged run. RSI was oversold and it took and price tooka a quick dive but was eventually caught by the 200EMA(in blue) in fact the candle that touched it formed a dragonfly candle so it appears bulls must be afraid of dragonflys as it has scared the bulls the opposite way and back on course. The 4 hour RSI is back under oversold levels which is good because that, combined with the dragonfly reversal and subsequent green candles shows that the bull run is still very much on track for the original head and shoulders distance and possibly more (possibly even validating a larger head and shoulder neckline still)We are currently inside a new upward channel(tan lines) so it will be interesting to see if we find resistance at the top trendline of that channel...I think theres' a chance we could test the resistance of the green downward channel's top trendline directly above it as well, a channel we've been stuck inside all year. Only buy the dips...this dip was a good one to pick up on. make sure the dips aren't indicating that they are about to be over before you do as well.
Comment:
you can see how the 200EMA(in blue) squeezed the price action back up above the t line(in yellow) most bullish price action happens above the t line.
Comment:
The candle on the day chart is cause for concern however. We have an hour left until todays candle closes and it currently hasn't seen enough volume boost from the 2 green candles that followed the dragonfly candle to necessarily keep the day candle ending as a green candle. However that may be a good thing because if it rises just a little it will turn into a hanging man which definitely signals a reversal. If the volume placates for a bit it will just finish as a bullish inside bar which is usually safer for the bull trend to keep going forward.
Comment:
right now it looks like the price is being squeezed between the tline(in yellow) as support and the potential new extended neckline in the tan dashed line. If we close above that dashed line tomorrow we may trigger a much deeper inverted head and shoulder price spike. I'm not sure if head and shoulder patterns can be deeper than originally thought or trigger twice or not but if so that would definitely give us the bullish momentum we'd need to bust up outta the trendline.
Comment:
we are still not even close to oversold on the daily chart.
Comment:
so a new dayc andle has starte and the old one has finished as an inside bar. now would be a good small laddering in opportunity with a smart stop loss set. I see the bull trend continuing...but with banks closed in the U.S. because of a national holiday that may effect it somehwhat volume wise.