Good day Traders
Our $3470/$3500 support has been holding strong. Although we keep getting rejected by the $3550/$3600 resistance, we now have on the 2H so still expecting a move to the upside. Our 1D SMA50 is going to be strong resistance yet again, this time around $3670 but we first need to get above $3600. The way I see, we have 4 scenarios playing out with regards to this retracement after our drop from $4100.
4 Scenarios:
Unable to close above $3660/$3720
If we are unable to break through the $3660/$3720 resistance with higher than a 38.2 fib retracement of the larger move from $4100, then I suspect we’ll be retesting our $3470/$3500 support yet again, as well as our weekly SMA200 support, which would then confirm support of the large blue channel if we do then find support above our weekly SMA200.
This would also be a 61.8 fib retracement of the smaller drop from $3776 (1D SMA50) with a 161.8 fib extension target of $3280 which also coincides with our weekly SMA200 support.
Unable to close above $3600
If we reach $3587 but can’t even get above our $3600 resistance, this would be a 38.2 fib retracement of our recent smaller drop from $3776 and would give me a 138.2 fib extension target of $3552. Both targets are in line with our blue channel support.
Unable to close above $3860/$3930
If we break through our 1D SMA50 resistance, this would be in line with the ascending right-angled from my previous post. I think the upside will be capped at our $3860/$3930 channel resistance, unless we have enough buying to break the downtrend and start forming higher highs (unlikely ).
A move to channel resistance would also be a 61.8 fib retracement of the move from $4100 so could potentially carry enough downside momentum to break channel and weekly SMA200 support for a 161.8 fib extension to our $3k support and that will be a crucial ito market sentiment.
A move below our current support as well as our $3470/$3500 horizontal support is but the bears will officially take the reigns once we have broken through the channel support, the weekly SMA200 support and $3k. Until then we could remain range bound between $3k and $4200 so better to remain even keel until we have a break of either.
Close above $4200/$4240
In the unlikely scenario where we have already bottomed and we just don’t know it yet, we need to keep an eye on $4200/$4240 resistance to form a higher high.
Good luck and happy trading!
Previous post:
Larger potentially in play:
Published at Tue, 22 Jan 2019 10:09:12 +0000
