PPC/USD Technical Analysis – 24th Feb 2014

Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal. After some fairly strong bears, Peercoin

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

After some fairly strong bears, Peercoin seems to have reached a period of consolidation for the time being.

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Lets take a look at the hourly chart on PPC/USD below (click to expand).

ppcusdh1_24_02_2014

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We can see how price rose from a low of 3.28 at the end of last week, to a high of 4.10 approximately twenty four hours ago. Then began the drop. Indeed, the drop wasn’t a surprise, given the fact that strong technicals were telling us of this probability. Firstly, the Accelerator Oscillator had been red for quite a few hours. Secondly, the Stochastics were overbought/undersold, whilst having crossed over, bearing downwards. In conjunction, the Awesome Oscillator also turned red within the hour.

Price fell down pretty quick in a short span of time, and there were particular candles this morning worthy of note. Firstly, the candle I’ve circled in blue. Why is this of interest? Well, look how huge that candle is, without any wicks whatsoever. So what happened was that most of the candle’s body was actually beneath the lower Bollinger band, yet looked where it stopped. At the 61.8% Fibonacci retracement level. It just shows the strength of Fibonacci. A candle this strong, this bearish, without any wicks, can be stopped dead in it’s tracks by a simple line of Fibonacci.

The next candle of important is the one immediately following it, circled in white. This is very interesting because, whilst being a bull candle, it’s entire candle’s body is contained outside of the Bollinger bands, specifically the lower band in this case. When this happens, it’s a strong reversal signal, so pay attention to further technicals you may encounter for corroboration.

Over the next five hours, price tested the 61.8% Fib level a further three times, and in the meantime, the AC and the AO have both turned green, whilst the Stochastics (10,6,6) have crossed over and heading upwards. The only issue is that on this occasion, we have the middle Bollinger line acting as some resistance.

Right now, price is hovering around the 50% Fib level, and I wouldn’t expect another trend to form before the day’s end.

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