As we have seen in my previous article that the priceline of Stellar was moving in a pattern. When I published my last post at that time the priceline of XLM was at the support of this and I was waiting for two more indicators to turn to predict the for breakout. These two indicators are and the . The reason I am using these two indicators to predict the breakout here because the price action of lumens is very much synchronized with these two indicators. On the chart it can be easily observed that whenever the priceline of lumen hits the support and the momentum turns weak from strong that is a kind of signal and gives bull cross then priceline takes a and hits the resistance of the .
I was expecting the same move this time. I am sharing the both screenshots the previous one and the current situation. It can be easily obeserved that when I shared the chart in my previous article at that time the was oversold and momentum indocator was strong . In the next screenshot you can see the current situation that when the momentum turned waek barish and the gave bull cross the price action again took powerful as it has been doing in the past and at this time the Stellar is attempting to breakout the resistance of this .
The previous move:
The current move:
Volume profile and bands:
here the two more indicators are playing very important role one is the indicator and other one is the . If we place the on the complete price action moving within the pattern then we can see that the trader’s interest is very weak below $0.038. Therefore when the priceline moved down where the trader’s interest is low the XLM turned and reached the resistance of the . And if we see the then it can be noticed that when the priceline made its first attempt to breakout the resistance of the in May 2019 then the was below the resistance of therefore it stopped the priceline of Stellar to have a breakout. After that the priceline made another attempt to break out the resistance of the in Feb 2020. At that time the was again below the resistance of and became a strong hurdle for priceline to breakout. But this time we have some different situation the is above the resistance of the . Therefore the price action of Lumens can easily move out from the resistance of , moreover if we observe the movement of the then it can be easily seen that the is slightly moving up and showing its tendency that it is making the way for the priceline to move up.
During the strong move in the month of March 2020 the XLM has completed the formation of pattern. I also have shown this pattern in my previous post. If we take a closer look on the chart then it can be easily noticed that the priceline has just hit the spike in the potential reversal zone and as per sequence of the price line was the supposed to move up in the area of A to D leg from 0.382 to 0.786 Fibonacci level. We can see that finally the price action took a powerful and produced more than 93% rally. At this time the 0.786 Fibonacci level is a strong resistance for the Lumen. And we can observe at this time the price line is hitting at this level for third time this is the same level where we also have the resistance of the pattern.
Simple moving averages.
The position of the simple moving averages on the also goes in the favour of the breakout from the pattern. If we see on the then the priceline has aggressively crossed up the 25, 50, 100 and 200 simple moving averages. Now it has the strong support of all these SMAs . And the 25 has formed the golden cross with 50 and 100 SMAs and moving forward to cross up the 200 . Following the 25 50 is also moving up to form the golden cross with 100 and 200 SMAs . The golden cross between 50 and 200 is considered as a strong signal among the traders community. They always take it as a strong buy signal. After that we can expect the 100 will also form the golden cross with 200 . And after all these golden crosses we can have a complete opened mouth of the moving averages below the price action of XLM that can produce more powerful rally.
Long term resistance levels:
Now if we switch back to the weekly long-term chart. Then we find two major resistance levels on the way of Stellar . The first is $0.09, We can see that upto 2019 this was working as a strong support for the price action but once it is broken down in August 2019 after that the Lumen never able to cross up this again even after 3 attempts. Once the priceline will be able to cross up the 9 cents resistance then the price action may re-test this previous resistance as a support and move up to break out the next major resistance at $0.14 after breaking out this resistance the XLM doesn’t have another other resistance upto $0.23, so we can expect a faster move from $0.14 to $0.23.
Powerful move that can lead the XLM to hit $2:
Now I would like to show you my favourite part of this analysis and that is the move of Stellar . If we move back in 2017 the priceline formed a big on long-term weekly chart. And from the potential reversal zone of this the price action moved up with very powerful that leaded the Stellar to hit $0.51 that was more than 4000% powerful rally. Now if we switch to the more bigger time period monthly chart then we can observe that same as like the previous move of 2017 the price action has a gain formed another very big pattern. And from past 5 months the priceline was moving at the bottom of this is BAT and now it has retraced back in the potential reversal zone. The potential reversal zone of this BAT starts from $0.11 and ends up to $0.059. We can expect another very big powerful divergence from this PRZ level but if I talk realistically then as per Fibonacci sequence the price action of Lumens should enter in the area from 0.382 to 0.786 of A to D leg. That is from $0.23 up to $0.41 that is also upto 600% big gain. However for stop loss we should use the potential reversal zone to minimize our risk.
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.