Looking at the above we can see the 20- 50- and 200- day which highlights the uncertainty in the market right now. All three are consolidating towards the price action which means decision time is drawing nearer. On top of that, we are right in the middle of the long-term support line and dotted resistance line. ALSO, having just broke the dashed resistance again, we have been rejected by the 200 . It is promised to be a spectacular show when it breaks but until then we can expect this bouncing up and down to continue so let’s zoom in to see where we can go in the near future.
We can still expect sideways action for now as the battle between bulls and bears continue and the moving averages converge. As you can see from the 4 hour chart below, it looks like we have found support by the 78.6% level and also supported by the divergence on the . We also had a crossover in the oversold territory on the Stochastics and we have just turned up out of this area. We can confirm the reversal here upon a break of the black resistance line. To me, this is the most likely scenario at the minute, with a target of the dotted resistance line. Here it is unsure whether we will break this target but a good clue would be the amount of momentum we could build up on the way there. After bounces near the support line we have seen the strength quickly fade away and wipe out nearly all gains made. This isn’t a good position for bulls. The other scenario is that we will be rejected by the black resistance line and test the orange support line made from the Feb 6th low. This would be the final chance to resume our path laid out or we would be heading for an EW failure for me, and a break below wave 1 would confirm it. Then we would head to the long term support line. Here we will probably have a nice bounce however we can expect the bears to come rushing back to push the price back beyond the support.
In summary, we are in a consolidation phase and the closer the EMA’s become, the more explosive/meaningful the break will be. We have two important levels. The red dashed resistance line for the bulls and the black long term support line for the bears. The sooner we break one of these, the sooner we can put this indecisiveness in the market behind us. At least for now. I am holding a bias as we are above the long term support line but the potential EW failure cannot be ruled out. It is risky to trade the ranges so I would advise tight stops (however I’m no financial advisor!). Let’s prepare ourselves for when these situations to unfold by doing our own research into the market and looking at other amazingly talented analysts that we have on TradingView to get a balanced idea of what’s going on. And, as always, LETS CRUSH IT!!!
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