Technical Analysis on EOS: This Time, the Bulls Hit Back

Yesterday the bulls hit back. During my last update, I argued EOS was following an ABCDE correction within a WXY pattern. We were waiting for wave E to find bottom.

In my last update, price was consolidating on top of the $7.00 support. I said the market looked weak, and we should prepare for a further drop in price...possibly as low as the $6.00 support. Price did end up dropping, but found bottom at $6.50, where we had a very impulsive looking bounce as high as $7.23.

Price is now correcting, but the correction is healthy looking...at least so far. This looks like a text book wave 1 and 2. Probability tells us wave 2 is likely to reach the 0.5-0.618 fib level. However, we have strong support at $7.00, which coincides nicely with the 0.382 fib level. Due to this, I would look for a bounce between the 0.382 and 0.5 fib. There's a great deal of resistance to get past between $7.30 and $7.70. Volume needs to greatly increase if EOS is to break above. Should that happen, we may see a scenario that looks like this:

If price drops below the 0.618 fib, then we will likely test the prior low of around $6.50. This might set up a double bottom where we hit the low, and impulse up. However, if price drops below the $6.50 low, we may see it continue to the $6.00 support/demand zone.

Looking at the 4 hour chart, price broke above the 8 day EMA and is now finding resistance at the 21 day EMA. This is a sign of short term strength. If price can break above the 21 day EMA, this latest rise may have legs. A decisive drop back below the 8 day EMA would be a sign of weakness and possibly invalidate my count above.

We’re continuing to watch the descending resistance line on the 1 day RSI. If it reaches that resistance line, we should be prepared for a drop. If it’s able to break out of the resistance, that would be another major sign of strength.

Watch my video analysis for MUCH more detail not found above.

Video Analysis:

BIAS:
Short Term: Slightly Bullish
Longterm: Bullish

I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Until next time, wishing you safe and profitable trading!

Workin

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by Workin2005

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