Hello all and good day to everyone.
Please reference my idea posted on march 30 titled "Weekly view, Bulkowskie's descending broadening wedge". I have been anticipating a particular pattern to be playing out.
The first thing I want to go over is a simple chart but looked at in a different way. Nothing fancy about it what so ever. The Heiken Ashi monthly chart is suggesting something very powerful in my opinion. This chart should have alerted you to the bull run that came after the $3,150 low seen last year. This type of candle is average based and can spot trends based on previous candle closes. As we can see, clearly our trend has been down for quite some time, with an attempt to change that which resulted in a further decline. However, the previous red candle in March has a VERY large lower wick and April is a reversal spinning top Doji. We have now shifted into green territory for the month of May. What will follow now is expected to be another green candle for the month of June and probably beyond.
Now looking at the weekly chart we can understand that a small pullback would be healthy in terms of continuing this price action since the major low. If we connect the wick highs it should be no surprise that we would stall at this descending resistance line. A great area of support now will be the 21 EMA on the 1W marked by this candle body. Also a major EMA on the 1D which will also be discussed.
If we adjust our upper line and place the support line on the candle bodies we can see our pattern take shape. This pattern should now unfold one of two ways.
1: Price begins to retrace back to the weekly moving averages , holds support and reverses sharply up and through this descending broadening wedge resistance line.
2: Price refuses to have any meaningful retrace from current levels and begins to break the resistance early. We would most likely see a small pullback to the resistance as support before continuation up.
Now let us analyze the 1D chart and see why we stalled where we did based on the supply and demand method.
You can see the upper rectangle marks the supply zone before dropping off below the 200D EMA. Now that we have broken above this moving average that there are a few daily wicks in there and no candle body closes. Our closest demand zone is right underneath the current 200D EMA. This tell us that a move down to or even under $8,000 would be nothing short of a bullish retest of a previous resistance now serving as support.
As for our short term price action, We are in a sideways consolidation and need more information if we are to come to a conviction for our next play. All we can do now is play this range and wait for candles to close either above or below these levels i have marked on the chart here
Nothing is write in these ideas is trade or financial advice. Please do your own research before making any decisions on the market.
Please reference my idea posted on march 30 titled "Weekly view, Bulkowskie's descending broadening wedge". I have been anticipating a particular pattern to be playing out.
The first thing I want to go over is a simple chart but looked at in a different way. Nothing fancy about it what so ever. The Heiken Ashi monthly chart is suggesting something very powerful in my opinion. This chart should have alerted you to the bull run that came after the $3,150 low seen last year. This type of candle is average based and can spot trends based on previous candle closes. As we can see, clearly our trend has been down for quite some time, with an attempt to change that which resulted in a further decline. However, the previous red candle in March has a VERY large lower wick and April is a reversal spinning top Doji. We have now shifted into green territory for the month of May. What will follow now is expected to be another green candle for the month of June and probably beyond.
Now looking at the weekly chart we can understand that a small pullback would be healthy in terms of continuing this price action since the major low. If we connect the wick highs it should be no surprise that we would stall at this descending resistance line. A great area of support now will be the 21 EMA on the 1W marked by this candle body. Also a major EMA on the 1D which will also be discussed.
If we adjust our upper line and place the support line on the candle bodies we can see our pattern take shape. This pattern should now unfold one of two ways.
1: Price begins to retrace back to the weekly moving averages , holds support and reverses sharply up and through this descending broadening wedge resistance line.
2: Price refuses to have any meaningful retrace from current levels and begins to break the resistance early. We would most likely see a small pullback to the resistance as support before continuation up.
Now let us analyze the 1D chart and see why we stalled where we did based on the supply and demand method.
You can see the upper rectangle marks the supply zone before dropping off below the 200D EMA. Now that we have broken above this moving average that there are a few daily wicks in there and no candle body closes. Our closest demand zone is right underneath the current 200D EMA. This tell us that a move down to or even under $8,000 would be nothing short of a bullish retest of a previous resistance now serving as support.
As for our short term price action, We are in a sideways consolidation and need more information if we are to come to a conviction for our next play. All we can do now is play this range and wait for candles to close either above or below these levels i have marked on the chart here
Nothing is write in these ideas is trade or financial advice. Please do your own research before making any decisions on the market.