Powerful signal a move:
Second signal was very obvious move by the price action of Polymath. The formation of this statement was started from 25th January 2020 on 4 day chart. And the pattern was completed on the 2nd April 2020. Since then the price action was moving in the potential reversal zone of this pattern that starts from 0.618 and ends up 0.786 level. And finally in the month of May 2020 the price action took a powerful and produced more than 180% rally so far.
Up channel formation:
After move the priceline of POLY token started moving within an on 12 hour chart. So far the price action is moving within this and during this move it is hitting the levels very well. At this time the priceline is at the support. I have also placed simple moving averages with the time period of 25 50 100 and 200 on this chart. And we can see that the smallest time period moving average is above all other simple moving averages and biggest time period moving average is below all the other moving averages. Therefore a complete open mouth by the simple moving averages has been formed and that is very strong signal. While the priceline is retesting the support of the channel it is also having the support of 25 simple moving averages as well.
Exponential moving averages are playing a good support role:
On the the price action crossed up the exponential moving averages with the time period of 10 in 21 on 15th may 2020. Since then the priceline is moving above the both exponential moving averages. If we take a closer look on the movement of price action above these EMAs then it can be easily observed that whenever the price action moves little bit down it uses these EMAs as support and moves up to start another rally. At this time the price action is again retesting these exponential moving averages as support.
Should we buy here? And if someone bought it then where to exit?
Now if someone wants to buy the POLY token after when the price action has already been surged more than 180% then he or she can buy it at the support of the channel and make this support the stop loss. Because the support of this channel is very much strong and it is very obvious since the price action has started the rally it has never broken down this support of channel.
Bill William indicator and stop loss technique:
Here I would like to suggest another technique that I use to catch such rallies. And that is the use of Bill William 3 lines that is also called the Bill William indicator. This indicator is very useful to catch the and is rallies. This indicator is a combination of three moving averages. The smallest one is with the time period of 5 the other one is with the time period of 8 and the biggest time period moving average is 13. The smallest one called lips the middle one is called teeth and the biggest one is called jaw. Whenever the smallest time period moving average moves above all other moving averages and the biggest time period moving average moves below all other moving averages then it is called that the mouth is opened. And this is a strong buying signal. And whenever the smallest time period moving average moves below all the moving averages and the biggest time period moving average moves above all MAs then it is called that the mouth is closed and that is a strong is sell signal.
Even though this is very useful indicator but however the time period of these moving averages is very small. Therefor sometimes this indicator can give the false signals. In order to avoid the false signals by this indicator we should use some other combination of indicators as well. For example here I am using the simple moving averages with the time period of 25 50 100 and 200. Now for example if the mouth will be closed then we can find that which one of other simple moving averages from 25 50 100 and 200 we have as recent support below the price action. Now for example if we have the 25 then we should wait for the 25 to be broken down. If this will be broken down then we can take exit as stop loss. This method can save you from the false signals of indicator and you will also not miss the next rally.
The that has been formed on the 12 hour chart has very much significance for this rally. If this will be broken down that will be the first strongest signal that now the price action can start a correction rally or a move. However, we should use some other combination of indicators like I have suggested to avoid any kind of false signals. If you have any strategy then you can also use that to avoid any unnecessary sell by getting trapped in a bear trap.
Note: This idea is education purpose only and not intended to be investment advice, please seek a duly licensed professional and do you own research before any investment.