Technical Analysis
1. Market Structure & Trend
• Bearish Momentum: After the peak in early November, the price has been making Lower Highs and Lower Lows.
• Consolidation: Since mid-December, the price action has flattened out significantly. We are seeing "tight" candles with small bodies, indicating a lack of conviction from both buyers and sellers.
• Support/Resistance:
• Immediate Support: Around $11.80 – $12.10. The price has wicked into this zone multiple times and bounced.
• Immediate Resistance: Around $13.00 – $13.20. This is the most recent local high that needs to be cleared for a bullish shift.
• Major Resistance: $14.50. This was the last significant lower high before the recent dump.
2. Volume Analysis
• Declining Volume: Look at the volume bars at the bottom. Since the mid-December spike, volume has been steadily decreasing.
• Implication: Low volume during a sideways move usually precedes a volatility expansion (a big move is coming), but it doesn't tell us the direction yet.
3. Candlestick Patterns
• The most recent candles are "Dojis" or small-bodied spinning tops. This represents indecision. The price is currently resting exactly on a historical pivot line (the dotted red line at $12.40).
Potential Trade Setups
Because the market is currently "choppy" and sideways, the best approach is to wait for a breakout rather than guessing the middle.
Option A: The Bullish Breakout (Long)
• Entry: Wait for a daily candle to close above $13.20 with high volume.
• Target: $14.50 (Primary) and $16.00 (Secondary).
• Stop Loss: Below $12.30.
• Rationale: This would confirm a break of the local downtrend and a shift in market structure to "Bullish."
Option B: The Support Bounce (Scalp Long)
• Entry: Limit order near $12.00.
• Target: $13.00.
• Stop Loss: $11.70 (Below the recent wicks).
• Rationale: Playing the range between established support and resistance.
Option C: The Breakdown (Short)
• Entry: Daily candle close below $11.80.
• Target: $10.50 (Psychological support).
• Stop Loss: $12.50.
