LTC/USD Technical Analysis – 5th May 2014

There might not be much activity on Litecoin from a longer timeframe perspective today, but zoom into the lower timeframes,

There might not be much activity on Litecoin from a longer timeframe perspective today, but zoom into the lower timeframes, and we can find some real technical nuggets.

Let’s take a closer look at the current LTC/USD chart on the fifteen minute timeframe below (click to expand):

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ltcusdm15_05_05_2014

I’ve performed the latest Fibonacci study from the high of today at exactly 10.4, until today’s low at exactly 10.1.

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Now, observing the two candles circled in white in the top left corner of the chart, we can see how both of them possessed relatively long upper wicks, whist having significant lower bodies, yet no lower wicks. For two candles like this to occur consecutively is significant and implies a reversal could be on the way. Furthermore, our first candle was contained outside the Bollinger line, and with its price action as it was, this really set the tone for what was about to transpire.

Concerning the candle immediately following the latter of the encircled two, (marked in red), notice how many of the technical indicators came into alignment, with the Stochastics crossing down from an overbought position, the Accelerator Oscillator and Awesome Oscillator turning red. Subsequently, price fell some distance, until 10.1.

Since the fall, there’s been a strong retrace, first to the 38.2% Fibonacci retracement level at 10.2, and then to the 50% mark at 10.25.

At the moment, price is residing at the 23.6% Fib level at 10.17, and given the fact that both the Awesome Oscillator and the Parabolic SAR have been bullish for a number of consecutive candles, I believe that 23.6% shall hold firm for the next half dozen or so candles, although not necessarily exceeding 50% at 10.25 due to the low volume we’re experiencing right now.

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