Hi all. Just cruising around looking at a few charts last night and noticed a couple of things that prompted me to move this towards the top of my watchlist . So here's a daily and a weekly chart with some commentary to try and explain what I mean for anyone interested.
The first thing that caught my eye was looking at the latest down move where despite quite high volume price did not make much further progress downwards. I'm looking for anomalies or changes in behaviour, so that's enough to suck me in to investigate further. Glad I did- there's a few additional things that clearly indicate the down trend is weakening and losing momentum, like a shortening of the thrust downwards (comments on the chart). For price to actually stop and turn around however there needs to be more than selling exhaustion- demand has to step up and tip the balance into upwards momentum.
So is there any evidence that this is happening? Well yes and it's the first thing I noticed with the anomaly in the latest down move- if all that volume was selling pressure then price should have moved a lot further down. The fact that it didn't suggests that demand was starting to absorb supply. Trading volume in general has picked up at this level, and the Volume Profile indicator on the weekly chart shows that there has been significantly more interest since price dropped below $1.30 compared with any other level during the downtrend and since price was at about $3. Yes there's still plenty of selling intent, but the fact that downwards price momentum is slowing, combined with a significant increase in volume at the current levels is very promising.
Of course anything could happen with a tweet from the Donald or some news catalyst, but at the moment the chart suggests that the supply/demand dynamic is changing so is well worth watching for additional signs that it is poised to go higher.
Good luck everyone.
Weekly:
