EOS is still in a corrective pattern, somewhat similar to bitcoin at the moment. I discussed yesterday the possibility of this being an ABC or an ABCDE type correction. It's developed a wedge that very much looks like an ABCDE pattern.
If that's the case, it could play out a couple different ways. The first has wave D rising a bit further before it drops to complete wave E. This may look like this:
The second ABCDE pattern is the most bullish. It'd have the corrective pattern complete, with wave 1 currently in progress. The problem I have with this is, volume is weak. It doesn't seem like an impulse wave at this point. That said, many EOS first waves start off weak when following a long correction. They then end up gaining momentum. If this is the case, it may play out like this:
The second possible corrective pattern is more bearish in the short term. It would have EOS in an ABC type correction. To determine a logical place for wave C to drop, I pulled the fibonacci retracement tool from bottom to top of the prior 5 waves.
A logical place for wave C to drop would be between the bottom of wave A and the 0.5 fib level. However, there's strong support around $14.70. Due to that, I'm putting a target zone for wave C just above the 0.05 fib level. If this scenario is correct, the target for wave C would be between $16.00 and $14.70.
Once this scenario is complete, I'd expect an impulse wave up...something like this:
Looking at the 30 min MACD, we can see the histogram is being squeezed tighter and tighter within a wedge. As it moves closer to the apex, a breakout becomes more and more likely.
The 1 hour RSI has developed strong support at 29.9. If this support breaks, I would expect EOS to follow the ABC correction above.
Finally, looking at the 4 hour chart, we can see the 8 day EMA has fallen below the 21 day EMA. This is a slightly bearish sign, but I'm not reading too much into it at this time. If the 8 day EMA falls below the 55 day EMA, that'd be a very bearish sign and I'd need to reassess my analysis.
If you're unfamiliar with how EMA's work, please review my post explaining how to use EMA's to predict trend changes here: https://steemit.com/cryptocurrency/@workin2005/simple-effective-strategy-to-buying-and-selling-market-trends
BIAS:
Short Term: Neutral
Longterm: Bullish
I hope this has been helpful. I’d be happy to answer any questions in the comment section below. Thanks for stopping by!
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Disclaimer: I am NOT a financial advisor and this is NOT financial advice. Please always do your own research and invest responsibly.
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