The candle for the week of 16-22 December is the largest bullish candle of the year and is accompanied by large volume as well (yellow candle).
What is going to happen next?
Let’s take a closer look and find out.
Long-Term OutlookA look at the indicators shows that the RSI fell below thirty for the first time in years.
Furthermore, the MACD made a bullish cross and is heading upward. There is also some bullish divergence developing in the MACD.
On the other hand, the price is facing resistance from the 7 period moving average, which corresponds with the resistance area at $160-$180.
Medium-Term OutlookA look at the Daily chart shows that price rallied after a significant bullish divergence in both the RSI and the Chaikin Oscillator.
However, the MACD is losing steam and moving back below 0.
Price hit resistance in the cloud and formed an inverted hammer, which is a bearish reversal candle (yellow arrow).
Short-Term OutlookA look at the 6-hour chart gives us possible areas of support.
The RSI became oversold prior to the reversal, but there was no bearish divergence.
The first area of short-term support is formed by the 0.618 fib retracement line and previous support at $106-114.
- The price fell to the first support area at $80.
- Significant bullish divergence in a Daily timeframe.
- Short-term support area is at $106-114.
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