NMC/USD Technical Analysis – 21st Feb 2014

Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal. Namecoin has displayed a beautiful setup

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

Namecoin has displayed a beautiful setup on H4 which would be a folly to ignore.

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Lets take a look at the H4 chart below on NMC/USD (click to expand)

nmcusdh4_21_02_2014

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I’ve done the Fibonacci study from the high of the 17th of Feb at 3.9, until last night’s low, at 3.02. We can see how there was a Bollinger Squeeze throughout the 19th, with a breakout yesterday.

Early this morning however, something special happened in the sense there was a unique candle, informing us of a potential reversal. I’ve circled this in blue. As you can see the candle opened and closed below the lower Bollinger band. This often signifies a reversal, expect in this case, there was some major doubt, due to the upper wick of that candle relatively long – longer than it’s body in fact. However, it was interesting to note that the Stochastics of 10,6,6 had just crossed over and was a further strengthening of the bulls.

The next candle did exactly that, shooting up to the 38.25 Fib retracement level, at 3.36.

Right now, that level is behaving as a magnet (no pun intended), but with the AC, AO and Stochastics all heading upwards, I anticipate price to hit the 50% level later on today.

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