Recovery in sight

7. Aug. 2020

Two days ago I posted an analysis, which expected a correction after a breakthrough of the significant level $41 which made the price to rise even higher without any correction. Now, when we have a clear evidence, that the correction takes place, a various scenarios can be made. Considering the fact, that we are in a continual uptrend (series of higher highs and higher lows) allows us to draw a Fibonacci retracement levels so we can identify the important market levels, especially 50% and 38,2% of Fibonacci. Those levels of the last swing are in confluence with the broked descending trendline, which still in some specific way attracts the price like a magnet. The price may not however dive towards 38,2% of Fibonacci, since the current support is really strong and might not drop the price so easily. The Fibonacci levels are rather a confluence levels that help us understand the market structure, but might not necessarily be touched.

Once the price breaks the corrective line and closes above it, the long position would make sense.How far can the price rise is a serious question, because the closest significant resistance is $50. This trade however offers a likeable risk reward ratio with persuable arguments worth considering.

Signals:
- Fibonacci 50%-38,2% retracement
- Broken descending trendline and its following correction
- Significant support zone $40-$41