np! let me see if I can put into words what I am seeing.
First a explanation of the studies being used in the chart
I am using a daily(timeframe) chart & it has 3 tech analysis studies:
1/ moving averages 21(white),50(green),200(purple) ( I like to look at the gradient or slopes ie: up or down)
In a perfect bull trend the faster ma's should be on top so 21,50,200.
price trading above the ma's is also important.
The 21 ma is also called the mean.
you want to see price above the mean & breaking the upper Bollinger band if you are bullish the opposite case if you are bearish. In a strong trend prices tend to find support at the mean or ma's.
2/ Bollinger band (2 thick blue lines) measure of volatility - set to 2 standard deviations so bands contain price about 95% of the time. breaking the upper band is bullish & lower band bearish. the band contract when volatility is low & diverge when volatility is high. Before a big move (up or down) price tends to tighten and the bands will contract also known as a squeeze.
3/candlesticks - Green candlestick when price closes above the open & red is the opposite case. The body is showing you the force behind the move. The lower & upper wick shows resistance or support
I have annotated the chart from (1) to (11) so you can follow the major turning points.
Atm price is trading in a range between 10 to 34 cents
Significant accumulation in May with a retracement to the mean from a new low (1) to (3). Large candle bodies showing increase in volatility. price breaking outside the upper band (bullish).
Before the selloff May price was unable to break the previous high (4) this is where the resistance is for the range(weakness).
During the selloff we had two significant gaps which will act as major resistance on the way up.
Note how prices start to break the lower band (weakness) but the new low formed inside the band.
From the low in may(point 6) the swing up terminated at the second gap & unable to close outside the upper band.
The retracement (or support) was at 0.382 & close to the mean. (retracements are measured in Fibonacci retracements like 0.382 or 38% 0.5 or 0.618). The smaller the retracement the probabilities of a next leg higher are increased.
Yesterdays candle gapped up & had a wide range (or large body or momentum), high volume (5mil) (not seen since may accumulation phase) & broke the upper band & 50 ma.
Today volume at about 2.2 mil another wide range bar is breaking the upper band.
The upper wicks on today & yesterdays candles showing where possible resistance is & lines up with the support in may (point 10). Support often becomes resistance. The price level 22 cents is also the 50% fib level for the range.
Next resistance is 23 & then 25 cents (1 gap down) before attempting to break the previous high 34.
The Bollinger bands are diverging or more volatility which is what I like to see when price is advancing higher.
The gradient or slope of the mean is now sloping upwards or heading north.
Feel free to ask a questions if my explanation is still clear as mud
. cheers
