Welcome friends, to this update analysis on Litecoin! Let's get right to it! Looking at the four hour chart, you can see that (much like BTC) LTC is creating a bear flag, inside of a larger bear flag. This price action is essentially increasing the likelihood of a downside break of the larger bear flag. On the top of the small flag, you can see that the 20 EMA (in blue) is converging with it perfectly, which is increasing the resistance factor of the top of the flag. The current candle looks like it could move in to test the bottom of the flag, so I want to get this out quickly. If a downside break of the bear flag occurs, it could initiate some intense selling in LTC.
On the MACD, we can see that it has flattened out, as the momentum has died during this bearish consolidation. Volume is also decreasing, which is typical to see during flag consolidations, so the indicators are essentially confirming the flag action on the chart. That doesn't necessarily mean that a downside break is certain. Currently, there appears to be a high probability of a downside break, but I'm not here to "predict" whether or not it's going to break to the downside. That's not what analysis is all about. We identify patterns, and trade the breakout. Whether it breaks to the upside or the downside doesn't matter. I can make money either way, but for now, I am anticipating a downside break.
Here's how Magic plans to trade this flag. The moment it breaks to the downside, I will short it, with a stop loss just above the bottom of the flag, with the intention of seeing LTC fall to the 130 level. I will unload 1/4 of the position, at each 1/4 interval on the way to 130. If a reversal signal emerges anywhere in the middle of that trade, I would unload the entire short. If/when the rising green trendline is reached, I will exit my short position, and immediately look for a long position, after a bounce off of this extremely important rising trendline support. For now, let's keep our eyes on the charts, in anticipation of a breakdown of the flag. I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic. Au revoir.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
On the MACD, we can see that it has flattened out, as the momentum has died during this bearish consolidation. Volume is also decreasing, which is typical to see during flag consolidations, so the indicators are essentially confirming the flag action on the chart. That doesn't necessarily mean that a downside break is certain. Currently, there appears to be a high probability of a downside break, but I'm not here to "predict" whether or not it's going to break to the downside. That's not what analysis is all about. We identify patterns, and trade the breakout. Whether it breaks to the upside or the downside doesn't matter. I can make money either way, but for now, I am anticipating a downside break.
Here's how Magic plans to trade this flag. The moment it breaks to the downside, I will short it, with a stop loss just above the bottom of the flag, with the intention of seeing LTC fall to the 130 level. I will unload 1/4 of the position, at each 1/4 interval on the way to 130. If a reversal signal emerges anywhere in the middle of that trade, I would unload the entire short. If/when the rising green trendline is reached, I will exit my short position, and immediately look for a long position, after a bounce off of this extremely important rising trendline support. For now, let's keep our eyes on the charts, in anticipation of a breakdown of the flag. I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic. Au revoir.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
评论:
To draw the green trendline, connect the low of 11/2 with the low of 2/6.