Hello friends! Let's take a look at this update analysis on Stellar! Looking at the four hour XLM chart, we can see that a bounce occurred off of the pink support level that I drew on the previous analysis. You can see that a nice hammer was formed on the pink trendline, and price has rallied above the 50% retrace, and the 200 EMA (in purple,) but still remains below the 50 EMA (in orange.)
As you can see, I've done a bit of hypothetical analysis here. I've drawn a proposed head and shoulders pattern, over the current price action. We don't actually have a right shoulder yet, but I think there is a high probability that one will be formed. Looking at the chart, you can see that there are several overhead resistance levels, which could easily act as resistance, turning price back to the downside to form the right shoulder. For now, I just wanted to illustrate the potential for a head and shoulders pattern to develop here, so that you are aware of the possibility. As I've stated, the right shoulder is hypothetical, and I've drawn a decently large area for the shoulder to form. A shoulder could fill the whole area, or it could fail at the 50 EMA, and form a small shoulder right now. Regardless, a head and shoulders pattern here, would likely produce a test of the bottom of the ascending broadening wedge pattern (blue dashes.) I've been calling for a test, and possibly a breakdown, of the wedge pattern for weeks now. If the pattern holds true, it should produce a break to the downside. That's why I've highlighted the "huge failed breakout." It shows that an upside breakout was unsustainable, and the ascending broadening wedge trumps the rest of the chart. Knowing that, in conjunction with the rest of the indications, it seems as though a test of the bottom of the wedge is inevitable. For now, let's just watch to see if a head and shoulders pattern develops.
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.***
-MPC loves you-
-JD-
Komen
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If you want to see how I called the top in XLM, take a look at my older post...
BTC Keeps crashing everything is going down. It would be easier to put up what is going up for all TA ppl.
MagicPoopCannon
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@Bullion_Money, In the words of Col. Nathan Jessep "YOU CAN'T HANDLE THE TRUTH!"
-Magic-
Bullion_Money
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@MagicPoopCannon, You are correct on your analysis. I was just stating, it would be nice to see what is going up in this market besides ppl fustration.
isabelkabz
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I concur
rez7
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@Bullion_Money, he makes kickass charts out of this shit slide we are in, he can only show what the market gives.. he is showing xlm going up possibly breaking .60 again, what more do you want lol?