Hi Team,
We have entered a small trading zone at previous high which is expected as profit taking is occurring.
Looking at the previous top will give us some clues. The FEB top was a quick distribution into a shakeout creating the liquidity for larger players to enter. Remember - distribution are generally quick and volatile whereas accumulation are slow with and time consuming with decreasing volatility.
I have listed two scenarios here with neither more viable at this stage. I think overall we go higher after the prolonged re-accumulation we just had.
Confirmations of bullish behaviour:
*Supportive price at lower part of TR
*Decreasing volatility
*Relative long time in range
*Testing event at support with strong recovery and subsequent support in the TR
*Successful break of resistance with volume and support above resistance line
Confirmations of bearish
*Break down to 55K with no recovery in the TR
*No support volume on the break to 55K
*A break below support - retest to previous support and rejection
*Quick time in range like in FEB
Its wait and see at the moment.
Remember you are looking to confirm bias which indicates who is winning; buyers or sellers. At the moment the short term bias is up; so we are looking to confirm each step. If we have a deviation from what we would see in a bullish bias it should alert us as a potential change in market conditions and we can begin to craft a trade in that direction.
We have entered a small trading zone at previous high which is expected as profit taking is occurring.
Looking at the previous top will give us some clues. The FEB top was a quick distribution into a shakeout creating the liquidity for larger players to enter. Remember - distribution are generally quick and volatile whereas accumulation are slow with and time consuming with decreasing volatility.
I have listed two scenarios here with neither more viable at this stage. I think overall we go higher after the prolonged re-accumulation we just had.
Confirmations of bullish behaviour:
*Supportive price at lower part of TR
*Decreasing volatility
*Relative long time in range
*Testing event at support with strong recovery and subsequent support in the TR
*Successful break of resistance with volume and support above resistance line
Confirmations of bearish
*Break down to 55K with no recovery in the TR
*No support volume on the break to 55K
*A break below support - retest to previous support and rejection
*Quick time in range like in FEB
Its wait and see at the moment.
Remember you are looking to confirm bias which indicates who is winning; buyers or sellers. At the moment the short term bias is up; so we are looking to confirm each step. If we have a deviation from what we would see in a bullish bias it should alert us as a potential change in market conditions and we can begin to craft a trade in that direction.