NEO has made incredible gains this week, while many currencies have had overall drops this past week, NEO is 35% up. Today’s analysis will be partially a past analysis, and then a speculative analysis of what it might do in the next few hours to days.
Today we will look at:
- Cup and Handle
- Resistance (Term)
- The Wedge (Rising Wedge)
Cup and Handle
The pink line depicts what looks like a teacup and handle. This pattern is what is referred to as a bullish continuation pattern, where the trend upwards pauses, is traded down, rises again, and trends downwards, and then continues with its previous upward trend.
As this is a speculative pattern in the above example, I have drawn in the predicted pattern (orange candlesticks), should the cup and handle pattern be realized. It’s always a good idea to be looking not only at confirmed patterns, like with the pennant, which you can see well in advance, but also to be looking for these patterns on a daily, or hourly basis – depending on your chosen trading style. Seeing this pattern in advance, and watching closely for the price drop in the “handle” section of the pink lines, will help prepare you to buy at a lower price point, knowing that the price is likely to rise shortly thereafter, allowing you to sell for a healthy profit.
I deliberately put the term second today, because I want you to look at the cup and handle image above, and then look back at the red line on the above chart. You can clearly see on both graphs that there are two similar peaks, the left one, being a red candlestick with a very long wick, and on the right, two green candlesticks whose wicks reach a similar high point. This is referred to as resistance. It is a high point that the currency is unable to break during a period of time.
Wedges (Rising Wedge)
The next pattern we’ll look at are wedges, and in this case, a rising wedge. This pattern is usually a longer term pattern, and consists of two trend lines that slant either upwards or downwards.
A rising wedge is a pattern that is quite bearish, and signals that the currency is likely to head in a downward direction. The trendlines for this pattern converge, and both trendlines are slanted in an upward direction.
This pattern would be one to watch should you be ready to sell your coins at a high and wait for a new low point to re-buy.
That’s it for this week’s look at chart analysis, hopefully it helps you make slightly more informed decisions on buy and sell points. If you have any questions or comments, feel free to contact me on Twitter: @CryptTee