This is an interesting situation where we are near the support trend line of the grand bull move (1D chart below), but also near the trend line of the downward correction (4H chart below). On the 1H time frame we can see the blue curve support which became resistance, and a level of resistance where the previous highs have been formed. Main 2 scenarios to look at following the future price action and breaks/bounces/retests can occur are highlighted with the arrows.
First, the blue curve needs to be broken, any retest of it can provide a decent entry for signal, but the position of such entry is very important as the resistance trend line from the downward correction move on the 4H time frame can have an impact on the price. One scenario to reduce the risk and create a buffer zone for managing the position through trailing stop and securing it at break even, would be if the price meets support at the rectangle zone, with candlestick patterns that could signal a turnaround. This scenario is a bold one, as it implies a buy below the resistances that could be met in the blue curve and the red line, but it reduces risk while having room for preparing for any bearish sentiment.
Also another ideal scenario would be the reaching of the white ellipse zone, where all forces pushing this up and down meet, creating a potential scenario for a pop.
*!: The candlestick on the 1D time frame chart is a green interesting one. If this becomes bearish nearing the close, any long scenario might become irrelevant.
First, the blue curve needs to be broken, any retest of it can provide a decent entry for signal, but the position of such entry is very important as the resistance trend line from the downward correction move on the 4H time frame can have an impact on the price. One scenario to reduce the risk and create a buffer zone for managing the position through trailing stop and securing it at break even, would be if the price meets support at the rectangle zone, with candlestick patterns that could signal a turnaround. This scenario is a bold one, as it implies a buy below the resistances that could be met in the blue curve and the red line, but it reduces risk while having room for preparing for any bearish sentiment.
Also another ideal scenario would be the reaching of the white ellipse zone, where all forces pushing this up and down meet, creating a potential scenario for a pop.
*!: The candlestick on the 1D time frame chart is a green interesting one. If this becomes bearish nearing the close, any long scenario might become irrelevant.
Comment:
Second bounce from the blue curved support/resistance. Closely monitoring the price action on the 1H time frame to get a hint for any potential future scenarios: retest of the resistance, or a bearish wave that should also be monitored to see where it might end.
Comment:
The blue resistance has been broken and retested. If it holds, next hurdle would be the red downward trend line.
Comment:
There it is. The first encounter with the red trend line. Bulls fighting for their life to keep this above the blue curve. Let's see who wins this.
Comment:
We have liftoff! The break of the red trend line was very important. Hopefully the yellow zone becomes support and the bull momentum is strong.
Comment:
The view on the 4H time frame.
Not sure if the yellow support zone will be retested or pierced if this starts falling. On the other hand, if this is just the beginning of a larger bullish wave, that started at the Daily candle mentioned in the initial idea, trailing stop would probably sit better below the low of the long green candle from today on the daily chart.
Comment:
Retest of the support/resistance level. Let's see if it holds...
Comment:
The strategy with the trailing stop below the low of the long candles worked really well in this case (represented with the white dots). Also, the support/resistance yellow rectangle zone became irrelevant once it was finished, and after a retest of the red downwards trend line, the price continued the bullish move.
Comment:
It was a good run
The daily candle ended in the green, with a big shadow on the upside, which could be a signal that the bulls are trying to get back in this after the drop.