NMC/USD Technical Analysis – 21st Feb 2014

Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.

Namecoin has displayed a beautiful setup on H4 which would be a folly to ignore.

Lets take a look at the H4 chart below on NMC/USD (click to expand)

I've done the Fibonacci study from the high of the 17th of Feb at 3.9, until last night's low, at 3.02. We can see how there was a Bollinger Squeeze throughout the 19th, with a breakout yesterday.

Early this morning however, something special happened in the sense there was a unique candle, informing us of a potential reversal. I've circled this in blue. As you can see the candle opened and closed below the lower Bollinger band. This often signifies a reversal, expect in this case, there was some major doubt, due to the upper wick of that candle relatively long - longer than it's body in fact. However, it was interesting to note that the Stochastics of 10,6,6 had just crossed over and was a further strengthening of the bulls.

The next candle did exactly that, shooting up to the 38.25 Fib retracement level, at 3.36.

Right now, that level is behaving as a magnet (no pun intended), but with the AC, AO and Stochastics all heading upwards, I anticipate price to hit the 50% level later on today.