Technical Analysis - Stakenet
XSN/USD - 12/02/2019
As shown in the chart above, we will be analyzing the technical status of Stakenet against USD.
We will be asking a series of questions to come to a reasonable conclusion:
What is the current market structure?
Currently, on the 1Daily timeframe, we can see a locally a very steep and quick downtrend. This downtrend is leading into the previous area of support, where it has the possibility of showing signs of strength and creating a double bottom. In that case, this would turn into a reversal structure and create a reasonable opportunity.
Is this steep downtrend about to break?
We cannot speak in absolutes, yet we can take a look at how downtrends, which were so steep like this one behaved. Normally, these very steep downtrends are quickly exhausted and break at the next bigger area of support.
We have seen something similar around the beginning of this current year on Stakenet. The steep downtrend approached the area of support in an exhausted manner and created a double bottom.
Are Indicators supporting the idea of a trend-break?
There are two main aspects we will be taking a look at.
- The first one is the Volume, which is over the course of the mentioned downtrend getting lower and lower while experiencing buy-volume spikes. This is usually a clear sign of the trend being exhausted. In this particular case, it simply shows that there is not a significant amount of market participants left, which are interested in selling these levels.
- The second one is the CMF, this is a wonderful tool to spot divergences and we see just that. Currently still at a very early stage, yet evolved enough to be called a bullish divergence.
Overall, XSN/USD definitely looks like something I would like to have on my watchlist. As mentioned above, it is coming down to support and statistically, the chances are high at an area of support after an exhausting downtrend.
This Technical Analysis is made by Kong Trading. The provided Analysis should not be considered financial advice!