When I found this chart, I immediately thought, “wow what an ugly chart!” You can see the steep ascending nature between early 2017 to 2018, but then this market drops soon after that. And now, we can see the well defined sideways range as the market is trying to figure out should the price go up or down. With so many questions, I was going to cut this chart from my watch list.
I haven’t dived deep into this chart yet, but what’s the scoop with all large bearish drops!? These large black engulfing candles are pretty intimidating, especially if you are looking for a bullish story behind all of this.
Are there any gems to be found? Well, let’s take a closer look.
So, where are the opportunities here? It starts by understanding what a definition of a bullish trend is. For me, a bullish trend is one where the direction is making higher highs and higher lows. It’s very early to see here or even to consider it, but if we think the December 2018 bottom as the lowest point of this new trend, then we have two lows: December 2018 and September 2019. And from these lows, I can theoretically start drawing the uptrending support line.
What I’m about to say is a bit of a stretch, but if we take April to June 2019 as a resistance level – where the price was having a tough time to breakout. But now, in November, we are starting to see price wanting to poke through and break the sideways trend. This tells me that price is hinting that it wants to move higher and find strength here. Could this be the start of a higher high and higher low trendline? Could this be the start of a new bullish trend? We’ll have to continue to watch this.