The way I see it, this is either a broadening wedge or a falling wedge. The difference is that if this is a falling wedge, we might be approaching the falling wedge resistance to around $3740 which coincides with a 38.2 fib retracement to the 29 November high. There is also bullish divergence on the 1H MFI so expecting a move to $3740. We either then have a strong break out above the falling wedge with volume to our $4025 resistance (61.8 fib retracement to our 29 November high), or we fall back to the falling wedge support at around $3200 for another bounce to the wedge resistance at around $3500.
On the other hand, if this is a broadening wedge playing out, we still might break above wedge resistance when we get to $3740, however if we drop from there, we'll move towards our broadening wedge support at around $2800 before bouncing back towards resistance.
If we do have a bullish breakout, I'm expecting a move to our $4950 resistance (138.2 fib ext) then to either our daily SMA50 which coincides with a 161.8 fib extension at around $5236 and if we break above the SMA100, then we can expect to test SMA100 at around $5950.
We still need to test these moving averages at some point and there is bullish divergence on the 1D. The only problem is volume and the fact that we have hidden bearish divergence on the 4H so we might have a drop from our $3740 resistance. Then we'll see if our support lies at $3220 or $2800.
Good luck and happy trading!
On the other hand, if this is a broadening wedge playing out, we still might break above wedge resistance when we get to $3740, however if we drop from there, we'll move towards our broadening wedge support at around $2800 before bouncing back towards resistance.
If we do have a bullish breakout, I'm expecting a move to our $4950 resistance (138.2 fib ext) then to either our daily SMA50 which coincides with a 161.8 fib extension at around $5236 and if we break above the SMA100, then we can expect to test SMA100 at around $5950.
We still need to test these moving averages at some point and there is bullish divergence on the 1D. The only problem is volume and the fact that we have hidden bearish divergence on the 4H so we might have a drop from our $3740 resistance. Then we'll see if our support lies at $3220 or $2800.
Good luck and happy trading!
