ForexMinute.com — The sideways action in the Litecoin market almost broke trend during the 16/9 trading session. Soon after Bitcoin slipped through its bearish cracks, its silver counterpart too followed the action with similar gravity. Though, the support level we suggested in our previous analysis held the price from falling into the bearish area, resulting into a corrective flag formation.
As we now enter another day of trading and European session still in play, Litecoin is currently trending sideways with minimal volatility. The price action is visibly slow and is offering no attractive intraday opportunity for us day traders. Nonetheless, we have still recognized the key levels that would kept our trades under minimum risk. What are they? Let’s check out:
Litecoin 4H Chart
The price is currently in the midst of two important levels — with 2.699 serving as the in-term support and 2.877 as a currently unattainable in-term resistance level. These are the levels we’ll be watching out as a part of our daily intraday breakout strategy.
We would also be focusing on the technical indicators at this point to decide on the initial positions. As you can notice the 4H BTC-e chart, Litecoin is currently situated below its 50, 100 and 200H SMAs, while the 4H RSI has surged to 45 following the recent corrective action. The MACD indicator, meanwhile, is maintaining its negative bias.
Obviously, our first position would be a short towards the in-term support level, considering the formation of a bear flag — a pause action — upon the recent decline. The price will likely to test 2.699 fiat once again, a position that also offers a great buying opportunity, considering its ability to withstand the previous downward momentums. Though, we would also be placing a stop loss near 2.671 fiat to get us out of the position on a small loss should the bearish action extends below the support line.
Looking the other way, a bounce back towards the intraday peak near 2.805 would have us wait for an extensive corrective action. If the price manages to ditch the said peak, then we would enter a long towards 2.859 fiat, while maintaining our stop loss near 2.761 fiat. It would maintain our overall reward profile.