Bitcoin's recent markdown has put Wycoff and Distribution on a lot of new traders radar as well as investors who have not had to deal with this kind of pattern recognition. There were a lot of people that thought that it looked too picture perfect so disregarded it, Guess what? They were taken the most by surprise and I know what it is like to be there because I was there 3-4 years ago when I had problems believing in TA because so much of it so so bad.
That leads to good news on IQ as IQ appears to be in Terminal Shake out and it is looking picture perfect. I have marked out the lower end of the action and have left the top alone because I think the indicators have done a good job showing that resistance. The on the final stage of the shake out is lower than what took us edge to edge on the and value VPVR value area and this low helps us see that sellers are approximately exhausted. Another way to confirm the fact that the selling was relatively low is the Value Area did not move down. Much like a slow but persistent sell off can slowly bend a lower and lower it can also drag the value area down.
I have been watching IQ for a couple of years now and have a couple of posts. My last post was and I was going to update it when I bought some calls and I never pulled the trigger. This time is a bit difference. I have the stock and I have some OTM calls already on the books. It might go lower somehow but my entry this week is pretty solid for a long term hold and I hope to trade the options like a degenerate.
I have put the monthly on the weekly chart to show that price actin has gone below the monthly . That is a very solid entry point if you generally have any faith in the long term outcome of an asset. Price has also gone below the Value area which contains +/-1 standard deviation of by price. When price goes out of the Value Area to the downside when it recovers you often see price actin go coast to coast and end up at the top of the value area. If price action is as as I expect price can hop out of the limits of the BB and VPVR Value area as you can see in silver . From there price would enter into a multi-month re-accumulation.
The with EMAs also has a that I often don't show in my posts because if it isn't needed it just adds visual distractions. But the circles have shown times were a green week after a massive sell off has kinked the OBV at the and price action has recovered . If you look at the second blue circle you can see how above the Visible Range moved down. That means the sell off hit a tipping point and was significant to move the whole visible range down roughly $5. That VPVR has not moved down in such a serious way with this dump.
Below is silver with the and VPVR during the "Covid crash" and we can clearly see that buying with price action below both was a fantastic entry for a trade or investment. You should have the tools from the main chart to see all the key points of Accumulation. And I roughly expect something similar to happen with IQ . A rather quick move to or above the Point of Control and then a massive spike in price. I have not used the because silver futures are a different beast with a different history.
Fundamentals and Conclusion
I think IQ has a very strong chance of behaving like silver did after its dump, so I bought some. Silver sold off for no good reason, as it didn't lose its industrial or intrinsic value and it is not like you can spread a virus by contaminating a silver mine and IQ sold off because some over-leveraged hedge fund degenerate couldn't answer his margin call, his stuff got liquidated and the momentum traders took this way too low. There was a couple of days ago and it seems that the company can turn a profit within like, 5 years. Look at Facebook and Netflix below and how long it took these companies to have their stock clear the high of their first month of public trading. There is going to be a shake out off the weak hands. My only concern is a rout in tech stocks could take this lower but so far it is doing well.
I continue to think that the price action will pop out of the channel and band and IQ will enter a lengthy re-accumulation phase.