Yesterday I reaffirmed my short term outlook, but also mentioned that we could get a dead cat bounce over the next two weeks. In the post where I outlined my reasons for turning I also outlined 5 major areas of resistance that I will be watching out for.
The price pulled back yesterday before reaching the first area of resistance that I outlined ($7,675) and I was watching closely to see how much steem was behind that move. As it turned out there was not enough to create a new low and trigger my short sale entry.
Instead we created a higher low and have also established a slightly higher high. We are fast approaching the downtrend (red dotted) that has held strong since the 5th of May. This will be the third touch of the and I expect bears to be waiting in numbers.
I think this will be the single most important level of resistance. If the down trend can be broken then there shouldn’t be much problem getting back to $8,200. On the other hand if bears overwhelm the bulls at $7,600 then I expect a new local low to come in very quickly.
I still have an order set at $7,024 to open a short sale as soon as/if a new low is created.
Happy and trading and remember that likes/comments/follows are free!