After yesterday’s slump, Peercoin appears to have settled, with some consolidation taking place over the past eighteen hours, but we could see further bullish retests of a certain Fib level later today.
Let’s take a closer look at the PPC/USD hourly chart below (click to expand):
ACY Securities’ Sponsorship of Australian Turf Club off to a Flying StartGo to article >>
I’ve performed the Fibonacci study from the high of the month (on the 1st), at 2.175, until the low of the month at 1.705.
I want to focus on the rapid downtrend yesterday and the price action of the candles. As we can see, there were multiple, consecutive, bear candles. The majority of them (marked with red arrows), had very strong bearish price action, with long bodies, decent upper wicks, and perhaps most importantly, NO lower wicks. Frankly, you don’t get much more bearish price action than what we saw yesterday. However, take a look at the last candle of the drop, marked with a blue arrow. There’s an interesting observation to be made here. Notice something different? Yep, there’s a (relatively speaking), long lower wick, and NO upper wick. A complete contrast to the many candles immediately preceding it. This of course, is nowhere near enough of a reason to expect a retrace, since it was still a long bear candle, and catching such a falling knife is folly, however, we did have the Stochastic Oscillator approaching oversold territory, and the candle opened and closed below the lower Bollinger band.
Ultimately, there was a retrace, up to the 38.2% Fib level, circled in red at 1.884, before testing the current low again a few times throughout today, marked in blue ellipses. Since then, price has tested the 23.6% Fib level at 1.815.
With the Awesome Oscillator still green for a number of candles, and the Stochastics heading smoothly north, I expect further such tests of 23.6% later today.