TA+TRADE plan by Blaž Fabjan
Descending Triangle Formation:
A clear descending triangle pattern is observed with lower highs (resistance) and a horizontal support around the $0.14 level. This is typically a bearish pattern, but in some cases, it can lead to a breakout to the upside.
The current price is close to the triangle’s apex, indicating a potential breakout soon.
Support and Resistance Levels:
Resistance: The downtrend resistance line is around $0.145 to $0.15. A break above this level would indicate a bullish reversal.
Support: The horizontal support around $0.14 has been tested multiple times. If the price breaks below this, it could trigger a further decline toward the next major support at around $0.13.
Indicators:
Volume Moving Average Convergence Divergence (VMAC): There are visible divergences, suggesting that momentum might be building. The overall indicator seems to support a bullish divergence.
Relative Strength Index (RSI): The RSI is near the oversold region (~35.49). This suggests that selling pressure might be easing, and a reversal could be imminent.
Stochastic Oscillator: The stochastic is near oversold levels, which often precedes a bullish move if it crosses upward.
Hull Moving Average (HMA): The histogram is showing signs of reduced bearish momentum, with green candles suggesting a possible bullish shift.
Trading Strategy
Bullish Scenario (Breakout to the upside):
Entry: Consider entering a long position on a confirmed breakout above $0.145-$0.15 (the resistance line). This would signal the end of the descending triangle and likely lead to upward momentum.
Target 1: $0.17, which would align with the projected move from the triangle breakout.
Target 2: $0.19, a previous high and psychological resistance level.
Stop Loss: Place a stop loss below $0.138 to minimize risk in case of a false breakout or bearish continuation.
Bearish Scenario (Breakout to the downside):
Entry: If price breaks below the $0.14 support level with volume, it could signal a bearish continuation. Short positions could be considered in this case.
Target 1: $0.13, the next major support.
Target 2: $0.12, the next significant psychological support level.
Stop Loss: A stop loss above $0.145 (above the resistance) would minimize risk if the trade reverses.
To sum up:
The current technical picture is at a critical point with a descending triangle suggesting a potential breakout in either direction. The oversold conditions in the RSI and stochastic, along with possible bullish divergence, lean towards a bullish breakout. However, be prepared for a downside if the $0.14 support fails.
Monitoring the volume during the breakout is crucial to confirm the direction and strength of the move.
Descending Triangle Formation:
A clear descending triangle pattern is observed with lower highs (resistance) and a horizontal support around the $0.14 level. This is typically a bearish pattern, but in some cases, it can lead to a breakout to the upside.
The current price is close to the triangle’s apex, indicating a potential breakout soon.
Support and Resistance Levels:
Resistance: The downtrend resistance line is around $0.145 to $0.15. A break above this level would indicate a bullish reversal.
Support: The horizontal support around $0.14 has been tested multiple times. If the price breaks below this, it could trigger a further decline toward the next major support at around $0.13.
Indicators:
Volume Moving Average Convergence Divergence (VMAC): There are visible divergences, suggesting that momentum might be building. The overall indicator seems to support a bullish divergence.
Relative Strength Index (RSI): The RSI is near the oversold region (~35.49). This suggests that selling pressure might be easing, and a reversal could be imminent.
Stochastic Oscillator: The stochastic is near oversold levels, which often precedes a bullish move if it crosses upward.
Hull Moving Average (HMA): The histogram is showing signs of reduced bearish momentum, with green candles suggesting a possible bullish shift.
Trading Strategy
Bullish Scenario (Breakout to the upside):
Entry: Consider entering a long position on a confirmed breakout above $0.145-$0.15 (the resistance line). This would signal the end of the descending triangle and likely lead to upward momentum.
Target 1: $0.17, which would align with the projected move from the triangle breakout.
Target 2: $0.19, a previous high and psychological resistance level.
Stop Loss: Place a stop loss below $0.138 to minimize risk in case of a false breakout or bearish continuation.
Bearish Scenario (Breakout to the downside):
Entry: If price breaks below the $0.14 support level with volume, it could signal a bearish continuation. Short positions could be considered in this case.
Target 1: $0.13, the next major support.
Target 2: $0.12, the next significant psychological support level.
Stop Loss: A stop loss above $0.145 (above the resistance) would minimize risk if the trade reverses.
To sum up:
The current technical picture is at a critical point with a descending triangle suggesting a potential breakout in either direction. The oversold conditions in the RSI and stochastic, along with possible bullish divergence, lean towards a bullish breakout. However, be prepared for a downside if the $0.14 support fails.
Monitoring the volume during the breakout is crucial to confirm the direction and strength of the move.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.