BAND | If This Bull Flag Works Then A Big Rally Can Be TriggeredHi friends, hope you are well and welcome to new update on Band token. In my previous article we have seen that this token has surged more than 9000% after March 2020 up till now. Recently on the 4 hour small time period chart the price action of Band token formed a pennant and finally on 17th of August the priceline has broken down the support of this pennant.
The bull flag is still there:
If we switch on the daily time period chart then the expected bull flag is still there. The price action is likely to move up from 25 simple moving average. This is very positive gesture because before this the price action has been doing the same before the next bullish rally. For example if we watch the previous bull flag then there was a big distance between the price action and the simple moving averages. Then priceline moved little bit down and 25 simple moving average moved up to provide the support to the priceline of Band token. Finally using the support of this simple moving average the price action started the next bullish rally. Same move is likely to happen this time again. The price action of Band token was at high distance from the simple moving averages then it moved bit down and the 25 simple moving average also moved up and provide the support to the priceline. And now we can expect that the price action can start the next bullish rally from here.
Different indicators are turning bullish:
If we place the different indicators like MACD, Stochastic and Momentum on the daily chart. Then it can be easily observed that moving average convergence divergence (MCD) was strong bearish but now it has turned weak bearish. The Stochastic has also given bullish signals by giving bull cross, but the momentum indicator is still strong bearish. Once Momentum will be started turning bullish then it will be confirmed that the price action will start the next bullish rally from this bull flag.
Formation of new channel:
Now if we switch back to the small time period 4 hour chart. Then it can be noticed that after breaking down the support of the pennant the priceline of Band token has formed a new downturn channel. At this time the price action is likely to move to the support of this channel after being rejected by the resistance. Therefore the next few hours are very important, whether the price action will break out the resistance or breakdown the support. So we should keep an eye on the move of Band within this channel for next few hours. Once the price action will be able to breakout the resistance of this down channel then it will be a very strong confirmation for the next bullish rally.
Conclusion:
Even though the priceline of Band token has broken down the pennant on small-time period chart but we should also take care of stop loss. For that purpose we can use a support of the down channel that has been formed on the small time period 4 hour chart. If that support will be broken down then we can expect a powerful rally to the downside.
