On 7th Feb 2020 I posted an article where we have seen that the priceline of Lisk was moving towards $1.67 resistance level. And I predicted that if the price line will be able to breakout this resistance then it we can easily target the point of control of the volume profile of the complete price action of the Lisk. And we have seen that after breaking out the 1.67 dollars resistance level the price action even moved beyond the POC of volume profil. That was more than 65% bullish move but from 11th Feb 2020 up to 13th March 2020 the priceline turned very strong bearish and dropped down. As I have placed the volume profile on the complete price action of Lisk and as result at that time we had the trader’s interest very low below $0.98. Therefore when the price action moved down than that level then it moved up again. And at this time it is moving sideways.
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Strong support of 100 SMA:
If we switch to the 2 day chart then we will see another very strong support that has stopped the price action to drop down more. And this support is 100 simple moving average. Even though we can see on the candlesticks of 11th, 13th , 15th , and 17th March 2020 the price action has been moving down below this simple moving average but no candlestick has been completely opened and closed below this support therefore so far the Lisk is failed to breakdown the strong support of 100 simple moving average on 2 day chart.
Now if we switch back to the daily chart then it can be clearly observed that the price of Lisk has formed a down channel. We have recent two more touches at the resistance of the channel one is on 20th March and other one is on 23rd March 2020. After that the priceline is likely to move down but this time it can be expected that the priceline will not hit up to the support of this down channel. because the bollinger bands is expanded up to $0.72. Once the price action will touch at this bollinger band support then it will stop the priceline to reach up to the support of the channel.
Formation of bullish BAT can lead the priceline down for short term:
Lisk is taking another move that is showing the tendency of moving down on short term time period. That move is the formation of bullish BAT pattern on daily chart. We can examine first leg was started on 13th March and it has been completed on 20th March. After that the price action is retraced between 0.382 to 0.50 Fibonacci level. That is the first confirmation of BAT pattern. Then B to C leg is projected upto 0.886 Fibonacci projection level and this is the projection of A to B leg. Now if the final I will be completed then we can expect the retracement between 0.786 to 0.886 Fib level that can be from $0.70 up to $0.62. But I am not expecting that any candlestick during this bearish move will be closed below the 100 simple moving average support on 2 day chart that we have discussed earlier. We can have only a spike up to this level of potential reversal zone of this bullish BAT. And from this potential reversal zone the price action can again take another powerful bullish divergence.
The volume profile is showing more positive results:
Now if we see the volume profile of a complete range of List price action then we receive more positive results. In my previous post the traders interest was very low below $0.98 but now we can see that the traders not interested to trade below $1.15. And previously we had the point of control of the volume profile at $2.09 and this time the point of control of the volume profile is moved little bit more up to $2.15. And at this time the price action is moving in the area where the interest of traders is very low therefore the price action can again take another powerful bullish divergence to hit at least up to point of control of the volume profile and that is $2.15 very soon.
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After hitting the channel’s resistance the priceline can move down little bit more on short term to complete the BAT pattern. But eventually it will be turned again bullish and break out the resistance of the channel and we can expect the bullish rally at least up to $2.15. So this time it can produce upto 246% profit.
Note: This idea is education purpose only and not intended to be investment advise, please seek a duly licensed professional and do you own research before any investment.