Like most of you I follow the price of steem quite closely. There are a few things that have got me quite excited about the current chart setup, (as well as a few other things that have also got me excited).
Lets take a look at the chart here:
These are 2-hour charts, meaning that each candle stick represents 2 hours of trading activity. It is shown over a period of the last 2 weeks.
I like to look at my charts clean with not much clutter on them, however, sometimes it really does help to have a few overlays and technical indicators to really help you get a clearer picture of exactly what is going on.
For that reason here is the same chart with a couple moving averages and Bollinger Bands included.
The moving averages are 20, 50, and 200 time periods.
What does the chart tell us?
The first thing that jumps out to me is that it looks like the price has finally reset after that big run up just over a week ago. There were profit takers after we touched $.28 as the price retraced for a couple days, but it failed to break that $.20 floor, which was a bullish sign.
Now we have the price setting in the low $.20's area on decreasing volume with the 200 MA rising to meet it. This is the first time we have had this setup in quite some time.
In the more immediate term, we also have the faster moving average crossing the slower moving average to the upside with both of the them under the price and pointing up. Bullish setup.
The Bollinger Bands are also pinching, which is a sign of a big move coming. They don't predict which way the move is going to go, but when they start to pinch like they are above, they indicate that a higher volatility move is coming.
I mentioned earlier that volume has been decreasing and why that is a good thing in this particular instance. It means that most of the motivated sellers have exited around these levels. The next bit of good news that causes some buying likely won't be met with much resistance from sellers until higher prices.
We also have the MACD pretty much completely neutral. It's not really a bullish position by itself here but given the chart setup, to me that MACD is bullish because it is showing that there is room to the upside before showing any kind of signs of being overbought.
Overall, this is the kind of chart setup that screams continuation of a previous move to me. First we had the big momentum up move, followed by some slight profit taking, but the profit taking wasn't able to push the price back to the previous lows. Now all the technicals on the chart have reset and are ready for the next move up. All it is gonna take is a minor catalyst...
Back in my trading days, this is a chart pattern where my alerts would be going off with a message reading "loading zone". Meaning it's a good spot from a risk reward perspective to be loading up on the long side.
Some other tidbits that have me bullish:
A couple other things to keep in mind that may help push the price higher are the way that rewards are currently being paid out. Currently zero liquid steem is being paid out and it has been that way for almost 2 weeks now. That means that any steem that is to be sold from earnings will have to be powered down or converted from SBDs. That may not sound like much, but sometimes just removing a little bit of supply off the market might be all it takes to send prices higher.
Another thing that has me bullish is the marketing efforts. I think we are just now starting to get a grasp on what exactly the marketing team wants to do with the their campaign. I imagine as their plans start to materialize and mature, and then get implemented, we will start to see new users coming in.
The rewards pool is also getting just a little bit fuller every day. Seeing the higher rewards causes a positive psychological reaction in most people that are actively posting and participating on steemit.com on a daily basis. The higher rewards also tend to attract outside users when they see the potential earnings that can be made from writing blog posts.
Adding these to the chart setup above only helps add to the bull case in my opinion. I would not be surprised at some point to see steem make a run for the $.30's in the next couple weeks.
Conclusions:
This is the calm before the storm in my opinion. A great spot to be loading for the continuation of the recent up move. The price of steem finally has some tailwinds at its back in the form of chart technicals. It also seems to have some fundamentals on its side right now making for a great environment for an up move in the price of steem.
Steem looks like a good buy as long as it holds the $.20 area over the coming days. Looking for a move into the $.30's within a couple weeks.
As always, remember to do your own DD before making any investment decisions.
*This is not investment advice. Just one former stock traders thoughts on where he sees the price of steem going next.
Live well my friends!
