Can Price Action Break Two Upward Channels?
The price has come into the mid-channel support that has been used as support and resistance since 2019. The short term trend is still within the bounds of the 1-month channel.
The RSI has room to go down before it reaches the 50 mid-line and the MACD shows the beginning of a downward trend.
The downward pressure might reverse around the 50 RSI, which would bounce up within the mid-channel support.
If a bounce occurs, the likely scenario is a dead cat bounce that leads to further downside, testing the bottom of the 1-month channel.
If the 1-month channel breaks, the bottom of the long-term channel becomes the support.
There is a very low probability of breaking the bottom of the long-term trend. That is the best accumulation zone and entry for a long.
Next best entry for a long is at the bottom of the 1-month channel.
The best short position is if a dead cat bounce occurs within the mid-channel.
The RSI has room to go down before it reaches the 50 mid-line and the MACD shows the beginning of a downward trend.
The downward pressure might reverse around the 50 RSI, which would bounce up within the mid-channel support.
If a bounce occurs, the likely scenario is a dead cat bounce that leads to further downside, testing the bottom of the 1-month channel.
If the 1-month channel breaks, the bottom of the long-term channel becomes the support.
There is a very low probability of breaking the bottom of the long-term trend. That is the best accumulation zone and entry for a long.
Next best entry for a long is at the bottom of the 1-month channel.
The best short position is if a dead cat bounce occurs within the mid-channel.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.