Welcome friends and haters alike, to this update analysis on LITECOIN! Let's jump right in! Looking at the four hour chart, you can see that my hypothetical inverse head and shoulders pattern is playing out nicely. The right shoulder is nearly completed, and I've got to say, (like BTC) it feels good to see that my analysis holds true, illuminating the way like a blazing torch in a dark forest of evil naysayers who creep among the trees!
Looking at the chart, we can see another positive sign, as LTC has broken above the 50 EMA (in orange) again, and that's something I want to talk about. You can see that BTC is beginning to breach the 50 EMA more frequently. This is decreasing the recent resistiveness of that level, so perhaps we will stay above it this time. I want to stress, however, (for educational purposes only) that we should never ever trade a pattern, until we actually see the breakout! A breakout above the dotted black neckline is required, to complete the inverse head and shoulders pattern. The vertical dotted black trendline represents the target area of a rally equal to the full potential of the inverse head and shoulders pattern. In other words, a breakout of the pattern will likely result in a breakout above the downtrend channel (in blue.) Speaking of the downtrend channel, you've probably noticed that I've modified it a bit. It now contacts the high made on 1/6/18 exactly, instead of intersecting it. I've always planned on making this adjustment, when the time was necessary. The old version of the channel contacted the high made on 1/14/18 instead, and it came into play with previous price action a bit more. However, it's best to avoid intersecting price action, when analyzing channels. That's why I have made this adjustment.
We're still working under a huge bullish divergence on the MACD, and we've just crossed over bullish above the zero line. If you look at the recent volume, it's also mostly composed of green bars, which confirms the momentum and the return of the bulls. The question now is, can the bulls follow through? A breakout above the black dotted neckline, and ideally above the downtrend channel, will confirm the follow through. A failure, and subsequent decline, will be cause to reassess the development of this chart. Keep in mind, that head and shoulders patterns can occasionally retest the right shoulder. We are in a critical area right now, so we will have to watch closely to see how things develop. Good luck trading, everyone!
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.***
I dumped 1 hour ago at 158 only to watch this thing run to 172 before getting back in again....jesus...do opposite of what I do and you will be rich
Andoitz
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@avianphlu5397, Just try that, make a very good plan but do it opposite, it might work
FHLGFBF07
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@avianphlu5397, sorry man, we have all been there before...which is why when it comes to LTC I just hodl. No worries you will be making multiple returns this year even at 172 : )
DonJackson
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The titles of your charts never fail to give me a good chuckle. Very excited to witness a much needed breakout before long. Thank you for your insight!
IAmSpoli
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@DonJackson, YOU GOT WHAT YOU ASKED FOR!!!! It's amazing to see technical analysis deliver such beauty in a chart.
DonJackson
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@IAmSpoli, I got what I asked for and more! The whole market is rumbling now!