IMX → Falling Out Of Bull Channel!? This Chart Shows The Way
Updated
Immutable token is showing weakness at the bull channel support line, flirting with the idea of breaking out and putting in lower lows. All is not lost! We have potential support zones below the current price of $1.28.
How do we trade this?
Up until 12 hours ago, our bias should have remained long because we were in a bull channel. That all changed once we witnessed the 3rd Reversal Signal as shown in the analysis, when our long bias should be put on hold until we meet the bull channel support line. The price did fall to the support line but had a weak bounce, a strong indication that the bull channel was ending.
Now the price is attempting to beak below the channel support and the RSI is aiding that perception by being below the Moving Average at 40.00 with room to fall.
We need to wait for a bear candle to close below the bull channel, confirming the breakout. Then it's reasonable to scalp to the 200EMA just above $1.10. Use a smaller position size since we're sacrificing Risk/Reward for Probability. Ideally, you should be able to run this trade 100 times and make a profit and since our Risk is equal to our Reward, this trade needs to be successful over 50% of the time.
Since the macro trend is still bullish, I would wait and see what happens at the 200EMA before entering a long. If we get a strong bull bar closing on or near its high, it may be reasonable to enter a long with a protective stop just below the 200EMA. Until then, use caution!
Trade Ideas
Short Entry: $1.25
Stop Loss: $1.39
Take Profit: $1.11
Risk/Reward Ratio: 1:2
Long Entry: $1.17
Stop Loss: $1.07
Take Profit: $1.37
Risk/Reward Ratio: 1:2
Key Takeaways
1. Weak Response At Bull Channel Support.
2. Currently Attempting Bear Breakout of Bull Channel.
3. Look for Support at 200EMA
4. If bounce at 200EMA, look for Bull Signal Bar to Long.
5. If Bull Close Here at Bull Channel Support, Consider Long.
6. RSI at 40.00, Bias to Short in the Short-Term.
You are solely responsible for your trades, trade at your own risk!
If you found this analysis helpful, click the Boost button and let us know what you think in the comment section below!
How do we trade this?
Up until 12 hours ago, our bias should have remained long because we were in a bull channel. That all changed once we witnessed the 3rd Reversal Signal as shown in the analysis, when our long bias should be put on hold until we meet the bull channel support line. The price did fall to the support line but had a weak bounce, a strong indication that the bull channel was ending.
Now the price is attempting to beak below the channel support and the RSI is aiding that perception by being below the Moving Average at 40.00 with room to fall.
We need to wait for a bear candle to close below the bull channel, confirming the breakout. Then it's reasonable to scalp to the 200EMA just above $1.10. Use a smaller position size since we're sacrificing Risk/Reward for Probability. Ideally, you should be able to run this trade 100 times and make a profit and since our Risk is equal to our Reward, this trade needs to be successful over 50% of the time.
Since the macro trend is still bullish, I would wait and see what happens at the 200EMA before entering a long. If we get a strong bull bar closing on or near its high, it may be reasonable to enter a long with a protective stop just below the 200EMA. Until then, use caution!
Trade Ideas
Short Entry: $1.25
Stop Loss: $1.39
Take Profit: $1.11
Risk/Reward Ratio: 1:2
Long Entry: $1.17
Stop Loss: $1.07
Take Profit: $1.37
Risk/Reward Ratio: 1:2
Key Takeaways
1. Weak Response At Bull Channel Support.
2. Currently Attempting Bear Breakout of Bull Channel.
3. Look for Support at 200EMA
4. If bounce at 200EMA, look for Bull Signal Bar to Long.
5. If Bull Close Here at Bull Channel Support, Consider Long.
6. RSI at 40.00, Bias to Short in the Short-Term.
You are solely responsible for your trades, trade at your own risk!
If you found this analysis helpful, click the Boost button and let us know what you think in the comment section below!
Note
Correction in my Trade Ideas section, the short position is a 1:1 Risk/Reward, not 1:2.
-Joe Dean
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