ForexMinute.com — After attempting an impress rally yesterday, Litecoin price once again ditched bulls to form a corrective wave. While it seemed more like a bull flag which often appears after a strong uptrend, it surely invalidated trades that were expecting a breakout scenario.
Our intraday breakout strategy meanwhile took out a decent profit by placing a short position towards range support. As we now enter another day of trading, the previous range is still holding itself fine, with 3.077 fiat serving as in-term support and 3.146 fiat as in-term resistance level. Let’s see how price action is planning to roll out today:
Litecoin 4H Chart
The 4H BTC-e chart above displays Litecoin in a neutral bias, for the price is still flirting with its 50H SMA, while RSI has dropped towards 50. The MACD indicator, albeit maintaining its positive bias, has dropped below its signal curve, indicating a near-term selling pressure in the market.
There is, however, a decent chance of price attempting a bounce back towards previous high, for the support line we indicated is proving to be pretty strong. We will therefore be placing a long position towards in-term resistance the moment Litecoin breaks above 3.095 fiat. On this trade, our stop loss will be maintained near 3.070 to get us out of the market on a small loss.
Looking the other way, a drop below in-term support will have us put a short position towards 3.058, our medium-term downside target. A further break, and we’ll enter a similar trade towards intraday low near 3.051 fiat. On both these trades, we will maintain our stop loss near 3.088 fiat.