Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
Namecoin is has been trending south since the start of the year, the question has to be asked, when will this long term trend come to a halt?
Let’s take a closer look at the NMC/USD Daily chart below (click to expand):
Take a look at the middle Bollinger line, look how smooth it is, thus proving what a clear downtrend this has been, without much interruption and with barely any major retraces, apart from during the end of January.
Indeed, there has been hardly any resistance to the selling.
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However, on the face of it, with classic indicators, there may be signs of a reversal, albeit temporary.
If we look at the daily candle on the 25th, we realize just how long it’s lower wick was, (ellipsed in white surpassing the lower Bollinger band by some distance, a sign that price may reverse any time soon. At the same time, the Stochastics were oversold. On the next daily candle, the Stochastics reversed, and both the Accelerator Oscillator and Awesome Oscillator turned green.
Even then however, such is the strong nature of the trend, price was only able to touch the 23.6% Fib retracement level before dropping some pips.
Even though I think there is still some potential for a move upwards over the next few days, it’s unlikely to last long, and for good reason:
Check out the chart below and the huge resistance shown via the trendline on H4.
It’s going to take some strength to break that line; I can’t see it happening with this latest minor reversal.