LTC: What next?
Hello everyone,
While it's very nice to see Litecoin make a move, finally(!), it got me thinking about hope and reality. Traders can certainly hope, but we better be in touch with reality if the trades are to be gainful. With that said, here is what I am seeing and I would love your feedback, especially if you think differently.
First and foremost, LTC needs to stay above the 23% fib line ($172.90). It has done so for 4 hours and we need another 4 hours to confirm a trend higher. In the past we have seen the resistance reject such advances. Will it this time? It appears not, but the low volume is a concern.
At this time the price is rising precipitously. Please note that both the Momentum and Stock RSI on the 4 hour and daily are overbought. On the daily charts, however, the momentum and Stock RSI are inching towards the overbought territory. Will this rally last and how long?
I went back to the last time we saw this type of a rise. After 2 entries into the overbought territory (Momentum), LTC stayed on an uptrend for 2 more weeks. Therefore, I have drawn a 2 week period out (yellow rectangle) to see how it will fare this time.
This is not to say that I expect a similar rise for LTC as we saw in December. I do not. The volume is too low. It is entirely within reason to expect that, if the current trend holds, then $173 will act as support and our next stops are $210 and $241 (gains of ~21% and 39% respectively). Again, we need more volume to bust through the 38% fib ($210). We should not be surprised if there is a slight consolidation period, either after 23% or 38% fib levels. The Stock RSI and Momentum being in the overbought territory will demand it.
On the downside, please note there are multiple levels of support, namely the 100 MA ($162), 200 MA ($157) and below that the 50 MA ($141). It is also interesting that we crossed the death cross without much comment. Momentum and FOMO will trump charts much of the time!
So, in summary, this is a strong move higher that has the potential for good upside and risk/reward. Of course, please do your own research and take my views as data for your own conviction. I would love to hear your thoughts. Thanks and until next time. Enjoy!
While it's very nice to see Litecoin make a move, finally(!), it got me thinking about hope and reality. Traders can certainly hope, but we better be in touch with reality if the trades are to be gainful. With that said, here is what I am seeing and I would love your feedback, especially if you think differently.
First and foremost, LTC needs to stay above the 23% fib line ($172.90). It has done so for 4 hours and we need another 4 hours to confirm a trend higher. In the past we have seen the resistance reject such advances. Will it this time? It appears not, but the low volume is a concern.
At this time the price is rising precipitously. Please note that both the Momentum and Stock RSI on the 4 hour and daily are overbought. On the daily charts, however, the momentum and Stock RSI are inching towards the overbought territory. Will this rally last and how long?
I went back to the last time we saw this type of a rise. After 2 entries into the overbought territory (Momentum), LTC stayed on an uptrend for 2 more weeks. Therefore, I have drawn a 2 week period out (yellow rectangle) to see how it will fare this time.
This is not to say that I expect a similar rise for LTC as we saw in December. I do not. The volume is too low. It is entirely within reason to expect that, if the current trend holds, then $173 will act as support and our next stops are $210 and $241 (gains of ~21% and 39% respectively). Again, we need more volume to bust through the 38% fib ($210). We should not be surprised if there is a slight consolidation period, either after 23% or 38% fib levels. The Stock RSI and Momentum being in the overbought territory will demand it.
On the downside, please note there are multiple levels of support, namely the 100 MA ($162), 200 MA ($157) and below that the 50 MA ($141). It is also interesting that we crossed the death cross without much comment. Momentum and FOMO will trump charts much of the time!
So, in summary, this is a strong move higher that has the potential for good upside and risk/reward. Of course, please do your own research and take my views as data for your own conviction. I would love to hear your thoughts. Thanks and until next time. Enjoy!
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