Despite a fall below 2 on Peercoin yesterday, we do now have some decent support which looks to have stopped the sell off in its tracks, yet - will it be able to hold?
Let's take a closer look at the latest PPC/USD Daily chart below:
I've performed the Fibonacci study from the low at 1.536 on the 13th of this month, until the latest high at 3.245 on the 16th.
Notice the two candles circled in red. Here we have a very powerful reversal pattern. Ok, so one is a bull candle and the other is a bear candle, but look at both of their upper wicks, exceedingly long, especially in relation to their lower wicks, which can be regarded as negligible, given the elongated nature of the candlesticks. The sequence was in the correct order as well, i.e. an inverse hammer, followed by a shooting star. The other way round would still offer bearish indications, but the way it is here is absolutely spot on.
This, in conjunction to the fact that they both opened and closed above the upper Bollinger band tells us a potentially strong reversal, or at least a retrace was on the way. Remember, price action almost always precedes indicators, subsequently, it took a few candles for our indicators to confirm the reversal, starting with the Accelerator Oscillator turning red.
Such was a potency of the reversal, price hardly paid attention to multiple Fib retracements, going through them without much resistance, barring 50%, although even that was somewhat of a mirage. Eventually we saw price retreat down to the 78.6% Fibonacci retracement level, i.e. the last major Fib retrace level - and it's only now where we've seen some resistance manage to take hold (marked in blue).
The good news is that the Accelerator Oscillator has turned green, but the bad news is that everything else is telling us sell, which might not be a bad idea - was it not for 78.6%. I've often found in trading, even if it seems like nothing can stop a trend in it's tracks - it's the 78.6% Fib that upsets the party. This could exactly be the case here.
