Hi friends! Congratulations to my second place Twitter voters, who voted for an analysis on Neo! If you aren’t following me on Twitter, please do. I promise, there is a lot more than just . =D So, without furhter ado, let’s get to the chart!
Looking at the for NEO, we can see that it is trapped inside of a . More specifically, NEO is inside of the bottom half, and has just popped off of a test of the channel’s lower . I know some people may reject the validity of this (particularly since there is only one touch on the top part of the channel) but hear me out. The bottom of the channel has several touches, so we know it is there. The centerline also has several reactions, which gives IT validity. Now the top part of the channel only has one reaction, but one reaction always comes before two. When I see something like this on the chart, I like to just draw the off of the most likely reaction point, which is the high from September 4th. I can almost guarantee that if price rallied up there, we would see a clear reaction. Also, it’s better to be prepared for potential resistance, than not. Additionally, the top of the channel is converging with the heavy . So, if a market-wide crypto rally kicks off, that is the main area of heavy resistance, that will pose the biggest upside problem, after the 50 (in orange) of course.
Since and others have started to pop, NEO has naturally seen a slight bounce. However, it’s still below the 50 and below the center-line resistance in the middle of the channel. Obviously, what happens going forward, will depend on the movement of . However, is looking increasingly , and if heads higher, NEO is likely to run up for a test of the 50 . That’s about 30% higher. Interestingly, most cryptocurrencies are approximately the same distance from their respective 50 EMAs. So, we could see the market collectively test the respective 50 EMAs.
On the , we’ve seen a series of two divergences. The current divergence shows that momentum is beginning to expand to the upside. Price is currently running into a bit of overhead resistance, from the lows of late November, but if/when those are taken out, the 50 will be next. Overall, the short-term bias is to the upside. However, major resistance is above us. If NEW was able to rally into that resistance, it would be nearly a 100% move. So, don’t take the upside potential lightly. First we contend with the November lows (right now.) Then the 50 , followed by the center-line of the channel, followed by the heavy . A failure at any one of those levels, will send us down to the previous . So, right now, a failure to surpass the November lows will put NEO back on the bottom of the channel. However, I think that is becoming increasingly unlikely.
I want to close with a point that I’ve been making on other charts. NEO (and others) broke down below the “Heavy ,” but never returned to test and confirm it as resistance. The market just smashed straight through it. So, we could be in the beginning stages of a market wide attempt to test that level, which was once major support, to confirm if it is resistance or not. That corresponds to the 5775-6000 level in . So, short-term bias to the upside — medium term bias to the downside. Remember, this is still a bear market. Even if we rally all the way to the heavy . We would have to explode above that, and hold support on top of it, for me to even consider a technical shift in the bear market. And with that, I bid you adieu.
Happy Holidays Everyone!
I’m the master of the charts, the professor, the legend, the king, and I go by the name of Magic! revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Published at Wed, 19 Dec 2018 15:02:19 +0000
