Starting with our daily chart on January 16, we view technically what could be a forming triple dead cat bounce. This may prove a confident entry for day traders.
One tool we will utilize in interpreting market behavior is our Fibonacci Retracement Line.
Starting with January 16th highs, connecting to February 2nd lows
You will notice that below the February 2nd low, I have drawn a demand zone, which has been tested on two occasions. The first test occurred on February 2nd,and the second on March 11th. Currently this demand zone is being tested a third time.
With a 52 week low marking this demand zone at 0.72000. The bulls managed to rally up to the 0.76 Fibonacci Line. Not before first testing 0.61 as an initial correction wave which marked our first corrective wave. Shortly after a second corrective wave broke through the 0.61 line. The third wave brings us to the 0.76 line, then dropping in the demand zone. Which we start a Fibonacci Retracement line, in preparation for another bull rally out of this demand zone.
What we are speculating;
If price action breaks above the demand zone, bulls may rally up the reatrcement zones of the downward leg from our third corrective wave. Afterwards, we would look for rejection from a fibinocccie line, then breaking into and below the demand zone. This would form a triple dead cat bounce, followed by a downward continuation.
OR
If price action breaks below the demand zone and does not rally above, an opportunity to go short will present itself.
One tool we will utilize in interpreting market behavior is our Fibonacci Retracement Line.
Starting with January 16th highs, connecting to February 2nd lows
You will notice that below the February 2nd low, I have drawn a demand zone, which has been tested on two occasions. The first test occurred on February 2nd,and the second on March 11th. Currently this demand zone is being tested a third time.
With a 52 week low marking this demand zone at 0.72000. The bulls managed to rally up to the 0.76 Fibonacci Line. Not before first testing 0.61 as an initial correction wave which marked our first corrective wave. Shortly after a second corrective wave broke through the 0.61 line. The third wave brings us to the 0.76 line, then dropping in the demand zone. Which we start a Fibonacci Retracement line, in preparation for another bull rally out of this demand zone.
What we are speculating;
If price action breaks above the demand zone, bulls may rally up the reatrcement zones of the downward leg from our third corrective wave. Afterwards, we would look for rejection from a fibinocccie line, then breaking into and below the demand zone. This would form a triple dead cat bounce, followed by a downward continuation.
OR
If price action breaks below the demand zone and does not rally above, an opportunity to go short will present itself.