Hi Traders! Litecoin technical analysis and short term forecast post is here. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the HomeTrader Club Spoiler alert – free memberships are available!
On the H4 chart, the price which was moving lower reached a strong support zone, respected it and bounced higher from this zone. In addition to this, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 74.06 and the second low that has formed at 71.02 based on the MACD indicator. The price then moved higher and broke above the last high at 79.67 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Also, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Until the strong support zone (marked in green) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further after pullbacks in the short term.
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Home Trader Club Team
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