NOTE: For an update (play-forward) of this analysis, click on the Tradingview chart image above, then the triangular play button when you get to Tradingview. Enjoy and comment what you think!
Good afternoon, trader friends! Perhaps you can relate to the following statement: Sometimes I literally “know” what an outcome of a chart will be with a high degree of clarity, probability, and ultimately accuracy. However, this is not one of those times. I can rationally make the case for several outcomes. That is not something I love….but since a follower asked for this, I’ll map out the 3 patterns and their likely paths, change of trend times, and price areas to watch for.
BOTTOM LINE:
We have patterns within patterns, but the cycles look good!
PATTERNS:
- Pattern-1: Long Term Neutral Large triangle wedge pattern (lime green and dark red lines) may be forming. If correct, it is unfinished and will have at least one, possibly two, more legs down toward the red long-term support trend trend-line, before we can say for sure if the pattern will resolve to the upside and moonshot, or tank into crypto oblivion.
- Pattern-2: Medium Term Bearish (possibly) Bearish rising wedge (cyan blue trend-lines) lines are converging in an upward direction. But it’s not a perfect pattern, as they sometimes look. Rising wedges typically resolves to the downside in a significant way. Moreover, OMG broke the lower support line at the recent May 23 low, which likely means eventual lower prices.
- Pattern-3: Short Term Bullish Falling wedge (yellow downward trend-lines) is short-term bullish and no matter what, a cyclical bounce is due now based on the two quite accurate cycles thus far.
CYCLES:
Two nicely aligning cycles lows are nesting now (making a low). OMG should have a tradable rally to the green downtrend line.
- Green cycle moving up and due to peak June 18.
- Green cycle bottoms again July 15th.
- Pink cycle is also moving up. Both the pink and green cycle are both due to top around August 10th as well.
INDICATORS:
- Klinger Volume Force is in a wedge . It also supports the idea that the eventual breakout, up or down, should be big.
- MACD is rounding in line with cycle lows due any day now.
SUMMARY:
- Short-term pattern and cyclical are bullish for a bounce, or more, perhaps until mid June
- Then, another selloff back to the lower cyan support trend-line, in alignment with the cycle low of the shorter-term green cycle, while the larger pink cycle is moving up.
- OMG with then either breakout the upside in line with the pink cycle moving up until about August 10th, while the pink longer-term cycle is also moving up and blast off.
- If the breakout does not happen by the peak of the Pink cycle (Aug 10th), then OMG is very bearish , and the bigger triangle/wedge will likely end badly for OMG.
- If OMG breaks out to the upside between now and June 18th, then it might retest the breakout line or pullback around July 15th then have a cyclical peak August 10th +/- 2 days.
POTENTIAL TRADE:
Consider looking for a short-term cyclical long trade. Lower risk area could be at the first higher swing low once a 34-50 bar EMA average (or something better) turns up and price is also closing above the average. If the trade doesn't move nicely after the first or second pullback on a 240 minute chart, then the outlooks would be quite bearish short-term and long-term.
DISCLOSURE:
This analysis is meant for educational purposes only. You trade at your own risk!
Cheers!
Michael Mansfield CIO
(Chart constructed 05/26/18, 8:15 PM EST)
Let me know what you think.
Comment Below!