We are still living within our larger Flag type consolidation... During this consolidation time, there's going to be volatility and much more difficulty in determining short-term direction.
Bottom Line: I hypothesize that price will go down from here and test our support again at the purple flag support which also is in confluence with the monthly 21 exp moving average.
Oct 11 Low connects to Oct 29 Low to create bullish divergence in the RSI. From this, we expected a bounce, and we got it. Since there is no measured move to be taken from the divergence we look to our scholastics to get some perspective. Are Daily Stoch's are in the overbought regions and are currently crossing. Also, the 2-4 hour stochastics are also in the oversold area and ready to come down.
We have attempted to break back into our previous channel (brown lines). Though we did pierce this resistance and do not see signs of getting meaningful support from these same lines. We have a few moving averages (discussed below) as well just under us but I believe that they will soon break and we will continue down to the purple support lines.
It's important to note what has happened with our moving averages as many algorithms buy and sell off of them.
200 EMA Daily (Red Line Plotted)
- We are still living below this highly watched EMA, which until we're trading above it things should be looked at with bearish lenses.
200 EMA (Daily) Crossed with our 21 EMA (Daily)
- Shortly after this cross price action went up and tested and rejected this exact area. Of course, we could go up again and pass through that level, but I am strongly leaning toward more downside to approx 264.
55 EMA Weekly 271.23 is right under us and is supporting price in the meantime, breaking below that level will mean that it will become resistance.
21 EMA Monthly merging with our purple Flag Support line in such a beautiful way. Its angle is the exact same as our purple line and has remained so since Sept 3. I expect that we will get supported even upon the second test of this area but if it doesn't hold. then this will be a Very Great entry for shorts and a clear area to manage risk from. So the bottom purple line is very important as its 2 things. Bottom of Flag support and our Monthly 21 EMA.
For the next few weeks, I expect price action to further decompose down to either of the purple support lines.
Bottom Line: I hypothesize that price will go down from here and test our support again at the purple flag support which also is in confluence with the monthly 21 exp moving average.
Oct 11 Low connects to Oct 29 Low to create bullish divergence in the RSI. From this, we expected a bounce, and we got it. Since there is no measured move to be taken from the divergence we look to our scholastics to get some perspective. Are Daily Stoch's are in the overbought regions and are currently crossing. Also, the 2-4 hour stochastics are also in the oversold area and ready to come down.
We have attempted to break back into our previous channel (brown lines). Though we did pierce this resistance and do not see signs of getting meaningful support from these same lines. We have a few moving averages (discussed below) as well just under us but I believe that they will soon break and we will continue down to the purple support lines.
It's important to note what has happened with our moving averages as many algorithms buy and sell off of them.
200 EMA Daily (Red Line Plotted)
- We are still living below this highly watched EMA, which until we're trading above it things should be looked at with bearish lenses.
200 EMA (Daily) Crossed with our 21 EMA (Daily)
- Shortly after this cross price action went up and tested and rejected this exact area. Of course, we could go up again and pass through that level, but I am strongly leaning toward more downside to approx 264.
55 EMA Weekly 271.23 is right under us and is supporting price in the meantime, breaking below that level will mean that it will become resistance.
21 EMA Monthly merging with our purple Flag Support line in such a beautiful way. Its angle is the exact same as our purple line and has remained so since Sept 3. I expect that we will get supported even upon the second test of this area but if it doesn't hold. then this will be a Very Great entry for shorts and a clear area to manage risk from. So the bottom purple line is very important as its 2 things. Bottom of Flag support and our Monthly 21 EMA.
For the next few weeks, I expect price action to further decompose down to either of the purple support lines.
