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Overbought

Bitcoin's short-lived Christmas joyMorning traders! I mentioned in the last update of my previous post that we were potentially forming an inverse H&S and that we needed to watch the wedge resistance, $3600 and volume because if we broke above the wedge, we would probably break above the H&S neckline. Well we broke through wedge resistance with volume and the H&S played out, although we never needed the full 38.2 fib retracement to form the right shoulder and give it juice. My target remains around $3900 but I'll be reducing this slightly from my previous $3950 target because of 2 converging trendlines which I believe will guide Bitcoin towards it's ultimate launchpad as we drop lower into the channel we have been printing. The converging support trend line starts from our Q3 swing low and support fits snug with our recent trending support which has been holding since 25 November. The converging resistance trend line starts from our 15 October swing high and acted as support for our 15 November swing low when were still above $5k. MFI, MACD, RSI etc are all overbought on the higher time frames and selling volume is drying up slowly so expecting strong resistance around $3900. We should also find resistance at our daily SMA30 which is very close. Our temporary bottom target does change slightly with the recent upwards correction. If you look at our drop from $5658 to our channel support $3473, you will see that we had a 38.2 fib retracement on the following leg up to channel resistance which gives us a 138.2 Fibonacci extension target of $2640. On the next drop from channel resistance around $4409 to our 14 December recent swing low ($3122), we again should have a 38.2 fib retracement (not sure it will reach 50 fib) which again gives us a 138.2 Fibonacci extension target of $2630. I think we should reach this target before finding a temporary bottom since these fib extension targets correlate so well. I think once we reach $2630/40, we should have a break from the converging apex and a strong move above the descending channel to the upside. I think we still need one last big move down so that the RSI will print a larger bullish divergence. Good luck and happy trading! Previous update's inverse H&S: Previous post:
BITSTAMP:BTCUSD
by Corn_Reaper
6
Simple Way to Read Oversold/Overbought Without RSIThis is how u can tell if a market is oversold (or overbought) by reading price and using our little 14EMA friend After price has a large push down (or up) like you can see in the yellow circles, it retraces up to the green circles In example 1, this yellow circle was right on the close of a huge bearish 4h engulfing. Perfect example to see how it is oversold by seeing the large gap between price and the 14 cyan coloured EMA And the following day we see this happen again in example 2. price pushes fast away from the 14EMA and therefore it needs to breath and retrace a little. No body can continuously sprint, neither can markets! "After big drop, markets must chop" Whether or not you have RSI on the charts, it is good to know when a market is oversold or overbought because nobody likes entering and seeing the trade go immediately negative, only to see it later where you thought after you closed in a loss Another cool term for a temporary up trend in an overall down trend is a dead cat bounce! This is a very very short term version considering we are looking at the 15m tf here ~ The trend is your friend and so are retracements ~
Education
by beank1
EURAUD: Trendline Break within Parallel ChannelEURAUD Timeframe: H4 Direction: Short Confluences for Trade: - Bearish candle formations - Stochastic Overbought momentum - Price action at Resistance of Parallel Channel - Breaking S/T Trendline within Channel - Widening gap between the EMAs - Fundamentally, EU-Italy impasse uncertainty yet to be priced in and may be volatile in the coming days while the AUD weakness has been pretty much priced in over last weekend Suggested Trade: Entry @ Area of Interest 1.5570 - 1.5850 SL: 1.5918 TP: 1.5559 RR: Approx. 2.10 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
USDCHF: Continue Selling on RalliesUSDCHF Timeframe: H4 Direction: Short Confluences for Trade: - Weakening momentum in rally - Price rejected 50 EMA - Price action at 38% Fibo Retracement - Price action at Resistance Trendline - Price action at Horizontal Resistance Trendline - Stochastic Overbought momentum (H4) Suggested Trade: Entry @ Area of Interest 0.9950 - 1.0000 SL: 1.0049 TP: 0.9842 RR: Approx. 2.00 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
EURGBP: Resisted by Waning MomentumEURGBP Timeframe: H4 Direction: Short Confluences for Trade: - Waning strength in bullish rally - Price at Horizontal Resistance - Likely to Breaking S/T Trendline - Stochastic Overbought momentum - Fundamentally, both nations have internal issues that have yet to be solved, it really depends on timing on the events release; do note that EU will comment on Italy's budget tomorrow Suggested Trade: Entry @ Area of Interest 0.8890 - 0.8930 SL: 0.8969 TP: 0.8767 RR: Approx. 2.16 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
EURUSD: Market Volatility PersistsEURUSD Timeframe: 1D Direction: Short Confluences for Trade: - Waning bullish momentum - Price action at Resistance of Parallel Channel - Price close to a Horizontal Resistance Line - Price reversing off a retracement of the 38.2% Fibo line - Stochastic Overbought momentum - Fundamentally, EU-Italy impasse still remains and concern about global growth outlook creating abit more volatility in the markets Suggested Trade: Entry @ Area of Interest 1.1415 - 1.1475 SL: 1.1509 TP: 1.1278 RR: Approx. 2.01 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
4
NZDCHF: Long-Term Short Trend NZDCHF Timeframe: 1D Direction: Short Confluences for Trade: - Price action at Strong Resistance Trendline (Since Jan 2015) - Price action at 61% Fibo retracement levels - Gap between 8EMA and 50EMA too wide - Stochastic Overbought momentum Suggested Trade: Entry @ Area of Interest 0.6825 - 0.6925 SL: 0.6998 TP: 0.6453 RR: Approx. 3.42 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
1
USDCAD: Retesting Previous Setup PostedUSDCAD Timeframe: 1D Direction: Short Confluences for Trade: - Upward momentum slowing - Price at Resistance Trend-Line (since June 18) - Stochastic Overbought momentum - Fundamentally, Canada's data is still strong, and Canada being a commodity currency was hit when oil price fell drastically, however, our view is that oil price has stabilize around this levels and this would provide a stop from USDCAD from weakening further. Suggested Trade: Entry @ Area of Interest 1.3200 - 1.3250 SL: 1.3318 TP: 1.3027 RR: Approx. 2.13 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
EURAUD: Strong Supports; Ready for Bounce?EURAUD Timeframe: 1D Direction: Long Confluences for Trade: - Stochastic Overbought momentum - Too wide of a divergence for 8 EMA and 50 EMA - Price close to Strong Horizontal Support (since Feb 18) - Price close to a Support Trendline (previously resistance; since March 18) Suggested Trade: Entry @ Area of Interest 1.5610 - 1.5670 SL: 1.5542 TP: 1..5884 RR: Approx. 2.89 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Long
by weekendanalyst
AUDCHF (1D): Strong Rejections for a Sell AUDCHF Timeframe: 1D Direction: Short Confluences for Trade: - Bearish Engulfing Candle (Daily) - Stochastics Overbought Condition (1D) - Rejection of 50% Fibo line - Rejection of Horizontal Trendline (since Feb 2018) - Price action reversed against Resistance of the Parallel Channel - Fundamentally, AUD is pressured downwards with the growth concerns lingering around China and trade war issues not resolved. The CHF will most likely continue to act as a safe haven pair if market volatility remains. Suggested Trade: Entry @ Area of Interest 0.7245 - 0.7330 SL: 0.7367 TP: 0.7057 RR: Approx. 2.04 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst
EURCHF (1D): EUR Event PlayEURCHF Timeframe: 1D Direction: Short Confluences for Trade: - Bearish candles formation - Price rejected Resistance Trendline (since May 18) - Horizontal Resistance Trendline (38% Fibo level) strong - Price broke the Short Term Trendline (since Sept 18) - Stochastic Overbought momentum - Fundamentally, Italy supposed to provide EU with a revised budget this coming Tuesday but from the likes of it, unlikely there would be any revision. The continuation of this budget issue will only make Italy's budget deficit worse with the Italian bond yields spiking higher. Suggested Trade: Entry @ Area of Interest 1.1370 - 1.1430 SL: 1.1497 TP: 1.1191 RR: Approx. 2.00 (Depending on Entry Level) May the pips move in our favor! Good luck! :D *This trade suggestion is provided on an advisory basis. Any trade decisions made based on this suggestion is a personal decision and we are not responsible for any losses derived from it.
Short
by weekendanalyst