NMC/BTC Technical Analysis – 4th March 2014

Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies. As I discussed in my analysis last

Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.

As I discussed in my analysis last week, Namecoin vs Bitcoin had been pretty much static for a number of hours, as there was a support line which was offering some hindrance. Indeed, that support held strong for the following few days, as it was also a psychological number, but, as I explained, price was always likely to fall, due to the bearish indications on higher timeframes.

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And fall it did. Throughout yesterday, price fell like a rock, barely caring for any retraces. Take a look at the NMC/BTC hourly chart below:

nmcbtch1_04_03_2014

I’ve done the Fibonacci study from last week’s median high, at the aforementioned 0.006, until yesterday’s low at 0.00525.

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And concerning that very candle which produced the low of 0.00525, it’s perfectly placed for a potential reversal. You’ll notice how the entire body of the candle opened and closed below the lower Bollinger line. In addition, both of its wicks are extremely long, it’s almost a doji candle. Dojis are great candles to look out for when seeking any possible reversals. Also, we had the Stochastic Oscillator just about crossing over, whilst being underbought/oversold.

In the following few candles, both the Awesome and Accelerator Oscillators turned bullish, further fuelling the reversal. Price then hit the 61.8% Fib retracement level (circled in red) to the pip at exactly 0.00572 before coming down to the 38.2% Fib level (circled in blue), and then pushing up again – this time beyond the day’s high at the time at 61.8%.

If we zoom out and take a look at the H4 chart, we’ll yet another major reason for the reversal at 0.00525, namely a strong trendline:

nmcbtch4_04_03_2014_sup

This, with all the above technicals I’ve mentioned, meant that a retrace was very likely indeed.

Right now price is around 0.00585, but with the AC having turned red a couple of candles ago on the hourly, price will probably come down to the 61.8% Fib level, before rising yet again, due to the current strength of the Awesome and Stochastics still looking bullish without being in overbought territory.

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