Looking at LTC on the 3 week perspective the 3 week upper band resistance has come down slightly to $139, which is a fair distance away and unlikely to be hit during this candle formation. Notice how the previous 3 week candle failed to break and close above the highlighted minor resistance level, and the current 3 week candle is trading above the 20 day Moving Average. This suggests that for LTC, price should come down to test the 20 da moving average on the 3 week chart, which also happens to be inline with a previous horizontal support level that the previous week candle closed above.
The two week chart gives us a nice indication of this, price opened on the upper Bollinger Band resistance and is now being pushed down to test the horizontal level of support around $66.
Also notice how the Moving Averages have crossed over, which implies that price should continue to the upside, but first they need to be tested as support, hence price should come down – though right now the cross over is around the 1 month 9 day Moving Average of $52, which is too low, so a more likely scenario from the two week chart is to see price test $66-$70 during this two week candle, leading onto the net two week candle which will bring the Moving Averages up to a similar level, ready to be tested before a move to the upside.
The weekly chart gives us more clarity on this movement, we can see that the weekly 9 day Moving Average is currently sitting right in our highlighted support zone that needs to be tested, and we can also see a slowing in momentum to the downside – the large most recent bullish candle was overvalued, the first bearish candle after that brought price down to test the upper Bollinger Band as support, followed by a further decline in price, bringing the value of LTC into an acceptable level.
However we can clearly see that price is sitting in the middle of a support and resistance zone, so this is not an ideal place to take a trade as it can essentially go either way – the correct way to trade is to buy on support, or sell on resistance, or sell on break of support and buy on break of resistance. Not to buy or sell when inbetween the two.
On the daily chart we can see things more clearly. Price is inbetween our two ranges, and also trading above a diagonal trend resistance – if I were to take this trade, I would wait for a touch of the diagonal resistance with a stop below the highlighted range support. However, id rather buy at the lower end of this support zone, below the diagonal trend, with a tight stop around $59.
If this doesn’t happen, then I wont trade it – when trading its important not to trade ALL the time, only take the very BEST opportunities that minimise your risk. If the opportunity doesn’t arise, then sit on your hands until another opportunity does.