LTC/USD Technical Analysis – 9th May 2014

Litecoin adheres to both the technicals on the four hour and the daily timeframe, as I discussed yesterday. It was a bit of a juggling act, but this is why it's important to ignore different timeframes.

During yesterday's technical analysis on LTC/USD, I posted the following chart:

Where I mentioned, "Conversely, we have some potentially bullish technicals on the Daily timeframe - so if the bears on H4 do execute what they're threatening to, i.e. a drop to 61.8%, we may see a swift reversal back to this week's high. Ultimately, I feel the technicals on the Daily, plus the psychological support of 10.0, may prevent the bears from taking long term control."

Thus, if we observe today's chart, we can see the above prediction has come into fruition (click to expand):

I.e. the bears managed to push price down to the 50% line at 10.25 (although I thought it would test 61.8% at 10.16), before bouncing back towards the high from midweek.

When price behaves in such a manner, almost exactly performing what the trader had calculated, it provides the trader with fuelling confidence in the tried and trusted technicals.

A great end to a great week.