Good morning, traders. The descending red resistance line I spoke about on Friday turned out to be exactly what we should be watching as price popped up and through as I was publishing my outlook. The H12 bullish divergence on the MACD histogram also was key. As I continue to tell traders, if you are intent on using EW you should also remain aware of patterns, divergences, etc. that may be setting up. This becomes especially important when the EW count is trying at best.
At this point, the count remains anything but easy, so we will look for patterns and we can see a large possible flag printing. The target based on the size of the flag (descending channel) is $535 above the point at which price breaches the top of the flag. The target based on the flagpole is about $1115 above the point at which price breaches the top of the flag. Within that flag, we should also note the impulse wave on December 28th and the corrective nature of the waves since then. This leads me to believe we have more movement to the upside in store before any possible significant movement to the downside. At this point, price has already retraced almost 61.8% of the entire move up, so it would technically be an opportune place to bounce. As of this time, the flag only has one touch of the top which means we can't definitively state it is a flag/descending channel. In order to do so, we need four alternating touches of support and resistance. I have drawn in the smaller possible channels as they are playing out inside that flag on the H4 chart. A breach of the smaller descending channel should provide a target of the larger descending channel's resistance.
Remember, price could potentially be printing a large IHS as well, but we really need to see volume expanding and candle spread increasing as it completes the right shoulder and breaks through the neckline. Failure to do so will most likely lead to failed follow through toward the proposed target around $5300/$5400. Currently, I am watching the H4 RSI for a breach through its resistance to signal bullish momentum. On the 15 minute chart, we can see that price is bouncing between the pivot and the S1 pivot. Like the H4 RSI, I am watching the 15 minute RSI for a break through its resistance as well. Notice that in both charts, price is consolidating at the HVN and is sitting just under the McGinley Dynamic. With RSI trending upward from oversold on the 15 minute, and nearly so on the H4, logic would suggest that we will see that move up and through all that resistance, but traders should still use caution and look for confirmations before entering.
Price took the road more traveled this past year and moved to the downside a bit. As I warned yesterday, traders should've been waiting for a confirmation in either direction which could've been either the close above the swing high or below the swing low, or it could've been the close above the triangle's resistance or below its support. The thing I'm watching most at the moment is the H12 MACD histogram. It is currently printing hidden bullish divergence (lower lows on the histogram but higher lows on price between December 3rd and today so far. I say so far because we need to see a shorter histogram print to confirm this divergence. As such, price could fall further before printing it.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
At this point, the count remains anything but easy, so we will look for patterns and we can see a large possible flag printing. The target based on the size of the flag (descending channel) is $535 above the point at which price breaches the top of the flag. The target based on the flagpole is about $1115 above the point at which price breaches the top of the flag. Within that flag, we should also note the impulse wave on December 28th and the corrective nature of the waves since then. This leads me to believe we have more movement to the upside in store before any possible significant movement to the downside. At this point, price has already retraced almost 61.8% of the entire move up, so it would technically be an opportune place to bounce. As of this time, the flag only has one touch of the top which means we can't definitively state it is a flag/descending channel. In order to do so, we need four alternating touches of support and resistance. I have drawn in the smaller possible channels as they are playing out inside that flag on the H4 chart. A breach of the smaller descending channel should provide a target of the larger descending channel's resistance.
Remember, price could potentially be printing a large IHS as well, but we really need to see volume expanding and candle spread increasing as it completes the right shoulder and breaks through the neckline. Failure to do so will most likely lead to failed follow through toward the proposed target around $5300/$5400. Currently, I am watching the H4 RSI for a breach through its resistance to signal bullish momentum. On the 15 minute chart, we can see that price is bouncing between the pivot and the S1 pivot. Like the H4 RSI, I am watching the 15 minute RSI for a break through its resistance as well. Notice that in both charts, price is consolidating at the HVN and is sitting just under the McGinley Dynamic. With RSI trending upward from oversold on the 15 minute, and nearly so on the H4, logic would suggest that we will see that move up and through all that resistance, but traders should still use caution and look for confirmations before entering.
Price took the road more traveled this past year and moved to the downside a bit. As I warned yesterday, traders should've been waiting for a confirmation in either direction which could've been either the close above the swing high or below the swing low, or it could've been the close above the triangle's resistance or below its support. The thing I'm watching most at the moment is the H12 MACD histogram. It is currently printing hidden bullish divergence (lower lows on the histogram but higher lows on price between December 3rd and today so far. I say so far because we need to see a shorter histogram print to confirm this divergence. As such, price could fall further before printing it.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.