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Daily Analysis: NASDAQ on New High Again as Tech Giants Report Blowout Numbers

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2388 0.25%
DAX 12470 0.14%
WTI Crude Oil 49.36 0.96%
GOLD 1266.00 0.26%
Bitcoin 1317 -0.08%
EUR/USD 1.0918 0.42%

 

Google’s parent company Alphabet and Amazon both posted great first-quarter numbers yesterday and the NASDAQ surged to new highs again overnight. The leaders of the current bull market remain very strong, although, on a negative note, only 5 companies (Facebook, Apple, and Microsoft are the other three) account for almost one-third of the whole market’s gains this year. This “narrowing” of the rally is typical late cycle behavior, giving an early warning sign for long-term investors. On the economic front, the prelim US GDP number came in at 0.7%, well below the expected 1.3%, which is the lowest number in three years.

The Dollar got weaker compared to the major European currencies again, as the Pound continues its quiet rise towards the 1.30 level. The Euro was helped by the slightly higher than expected Eurozone inflation number, while the Yen remained under pressure, following the Bank of Japan’s monetary statement. Oil bounced back strongly yesterday afternoon, but remains below the $50 level, while gold is still stuck just above the $1262 support that we have been monitoring for a week now. Safe-haven assets are still weak, but gold is relatively strong despite the broadly positive sentiment.

GBP/USD, 4-Hour Chart Analysis

Crytpocurrencies continue to be in the center of attention, as Bitcoin continues to trade near is new highs, while most of the majors are also pushing higher. Volatility and rotation are the names of the game today, as Ripple, Dash, Ethereum, and Monero are among the gainers, while the previously strong Ethereum Classic and NEM are in a short-term correction, and Litecoin is virtually unchanged for the day. Ethereum has held on to its break-out gains well, as it now trades near the $65 level.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The DAX has been suspiciously weak following the “French Election Rally”, as it failed to follow the NASDAQ higher in the second half of the week. The benchmark is still well within the rising trend channel, despite the recent consolidation, holding above the previous top at 12,375. The 12,500 level could be in focus in the coming days, but the current weakness suggests a swing lower towards the lower boundary of the trend channel next week. The MACD is signaling a bearish cross in overbought territory, providing a warning for short-term bulls.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
10:30 UK Prelim GDP 0.30% 0.40% 0.60%
8:00 GERMANY Retail Sales 0.10% 0.10% 1.80%
14:30 US Advance GDP 0.70% 1.30% 2.10%

 

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
13:45 UK Treasury Sec Mnuchin Speech
14:30 GERMANY Personal Spending -0.10% 0.20%
16:00 US ISM Manufacturing PMI 56.6 57.2
Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 470 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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XRP Price Analysis: XRP/USD Bulls Eyeing Big Breakout to the Upside

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  • XRP/USD price action is moving within a bullish pennant pattern structure, subject to a potential aggressive breakout to the upside.
  • There is a substantial area of supply that runs from the $0.3500-$0.3600 price range. The price has not traded convincingly above since 10th January.

XRP/USD: Recent Price Action

Ripple’s XRP price over the last three sessions has cooled marginally, following a decent bout of buying pressure. Life was kicked back into the bulls on 17th February, where the price jumped a chunky 17% over three days. On 19th February, the XRP/USD pushed to its highest levels seen since 10th January, up at $0.3550. Given how explosive the move was to the upside within such a short space of time, the market quickly eased away from those initial highs.

The price appears to be gradually moving back towards a stable path to recovery. XRP/USD from the back-end of December 2018 had been trending lower, this having taken place within a sizeable descending wedge pattern formation. It managed to contain the price right up to February, where the bulls were then able to force an aggressive breakout on the 8th. The price after this breach above the wedge then began to consolidate for nine days, before resuming its move north.

XRP/USD 4-hour chart.

As touched upon earlier, recent price action has entered into consolidation mode. The price behavior has formed a bullish pennant pattern structure. Given the current technical observation, it does appear the price is very much subject to another breakout to the upside. It’s interesting to note that there is a recent pattern of behavior that XRP has been notably moving within. The price is undergoing periods of consolidation, which lead to chunky breakouts before consolidating again to repeat the process.

Key Technical Areas

XRPUSD daily chart.

Immediate support runs at the lower supporting trend line of the mentioned pennant pattern. The comfort tracks around the $0.3230-00 area, and a breach here will rule out the technical set-up. XRP/USD would then be subject to giving back the gains that were initially triggered on 18th February, potentially returning down to the $0.3050-$0.3000 range. The mentioned territory was where the price was consolidating, ahead of the most recent bull run.

To the upside, resistance is seen immediately at the upper descending trend line of the pennant. The near-term barrier is at $0.3300, and a break above would likely invite some decent buying pressure. Eyes will then be on the high area of 19th February, $0.3500-$0.3550, where supply is noted. XRP/USD had not traded convincingly above this mentioned zone since 10th January, when the price re-entered a bear market. Finally, the bulls would then look at breaking down the $0.4000 region, which has on several occasions proven to be a very tricky area of resistance.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 126 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Litecoin Update: Wyckoffian Accumulation Complete

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From a technical perspective, Litecoin (LTC/USD) has effectively ended its bear market. This statement may sound unbelievable to many; even to some bulls. We’ve decayed in a crypto winter for so long that many of us have forgotten what a bull market looks like. We’re so used to seeing bounces fade and eventually get dumped on, that we’ve grown skeptical of rallies.

However, this time it’s different. It truly is, and we have multiple reasons to back up this claim. In this article, we explore the signals that show how Litecoin completed its Wyckoffian Accumulation.

Smart Money Accumulation Complete

A bear market often does not end due to exhaustion. It usually ends because a big player has entered the market to stop the bleeding. This individual or entity, which we’ll refer to as the smart money, absorbs the intense selling pressure of a capitulating market while keeping the price relatively stable. During this period of the market cycle, the smart money accumulate positions.

We believe that Litecoin has already completed this market phase. Its daily chart shows many similarities to a Wyckoff Accumulation Schematic.

Wyckoff Accumulation (Source: Stockcharts)

Preliminary Support

The first similarity is the establishment of a preliminary support (PS). According to the Wyckoffian theory, the PS offers some semblance of support after a prolonged or substantial move down. In Litecoin’s case, it registered a PS of $27 on November 24, 2018. During this time, Litecoin showed signs of stability after weeks of massive selloffs led by Bitcoin’s (BTC/USD) break below $6,000.

LTC/USD Preliminary support

Selling Climax

The second similarity is the presence of a selling climax (SC) or capitulation which occurred on December 7, 2018. On that day, Litecoin recorded lows of $22.24 while generating volume that’s over 115% of its daily average. The heavy volume points to the emergence of a big player. Also, notice how Litecoin managed to stay above $22 for about a week. This is another indication the smart money protected the bottom.

LTC/USD Selling Climax

Automatic Rally

The third similarity is the automatic rally (AR) after the selloff. The AR happens due to the selling relief provided by the conclusion of the SC. With reduced selling, buyers can easily push the price up. In the case of Litecoin, the AR drove the price to as high as $36.78 on December 24.

LTC/USD Automatic Rally

Secondary Test

The fourth similarity to the Wyckoff Accumulation is the secondary test (ST). During this stage of the accumulation, the price revisits previous lows to test the supply and demand. In Litecoin’s case, the ST coincides with the PS at $27.

LTC/USD Secondary Test

Last Point of Support

Like clockwork, Litecoin printed two last points of supports (LPS). The LPS is described as a previous resistance that was flipped into support. For instance, the first LPS was posted on January 13, 2019 when the market was trading at $30. Notice how the market struggled to go above this level between December 17 – 20, 2018. On January 13, Litecoin flipped this into support.

LTC/USD first last point of support

The second LPS of $32 was printed on February 2, 2019. Notice how Litecoin struggled to go above $32 from January 13 to February 1. When the market conquered this level, it did not look back.

LTC/USD second last point of support

Signs of Strength

Lastly, Litecoin showed signs of strength (SOS) on February 8 when it took out resistance of $40 with heavy volume. The volume printed on that day was over 390% of its daily average. To put that into perspective, that was Litecoin’s highest volume in one year.

LTC/USD signs of strength

With so many striking similarities with the Wyckoff Accumulation Schematic, we believe that Litecoin has completed this phase of the market cycle. Next comes the markup, which is most commonly known as the uptrend or the bull run. For this cycle, our minimum target is $110.

Bottom Line

Claiming that Litecoin is ready for a bull run may sound absurd to many. However, we dissected the market’s movement over the last few months and discovered that it has most likely completed a Wyckoffian Accumulation phase. If that’s the case, our minimum target for the markup is $110.

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 332 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Litecoin Price Analysis: LTC/USD on a Potential Launchpad for Another Rocket to the North

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  • The Litecoin (LTC) price remains elevated, as the bulls look at continuing the strong recent run higher.
  • Coinbase Wallet announces support for Litecoin, joining the likes of bitcoin (BTC), bitcoin cash (BCH), Ethereum (ETH) and Ethereum Classic (ETH).

LTC/USD: Recent Price Behavior

The LTC/USD bulls have resumed upside momentum, following brief and minor pullback observed in the session on Thursday. At the time of writing Litecoin is seen trading up in minor positive territory, with gains of around 1.5%. It is worth noting, since 8th February the price has gained as much as 60%, with the high print up at $53.65 produced on 20th February.

The big chunky jump north came after the price managed to escape a narrowing daily range block formation. LTC/USD was moving within the confinements of this for 11 January to 8th February. The breakout higher was very much explosive, given the prolonged period it has traded within. In terms of the initial spike observed on the 8th, it was a gain of around 45% in a single session.

Coinbase Wallet to Support Litecoin

Coinbase, the leading U.S. cryptocurrency exchange, announced it will now support LTC on their native Coinbase Wallet. This will allow users to store their LTC directly on the app. The fifth largest cryptocurrency by market capitalization will be joining the likes of bitcoin (BTC), bitcoin cash (BCH), Ethereum (ETH) and Ethereum Classic (ETH).

Users of the Coinbase Wallet are going to have the ability to download a required update with Litecoin support in the coming weeks via the Apple Store or Google Play Store. Storing LTC will be immediately available upon the completion of the update. Users will need to choose the ‘Receive’ option; this can be observed on the main wallet page to deposit LTC into the wallet.

In the official blog announcement, Coinbase said:

“The new Wallet update with Litecoin support will roll out to all users on iOS and Android over the next few weeks. LTC support is activated by default — all you need to do is tap ‘Receive’ on the main wallet tab and select Litecoin to send LTC to your Coinbase Wallet.”

Technical Review – LTC/USD

LTC/USD daily chart.

The Litecoin price has stabilized at heights above the psychological $50 price mark. A near-term area of demand is seen from the $50-$47 price range, which is helping keep LTC/USD propped up. The next upside targets for the bulls are seen just above a supply zone tracking from $55-$57. It last traded up at these heights back in November 2018. Should the bulls manage to maintain upside momentum, then eyes will be on a return into $65 territory, where the next area of supply is tracking.

In terms of support, as detailed earlier, immediate relief is found within the $50-$47 range. If this fails to hold, then a potential chunky wave of selling pressure would likely come into play. The next demand area to the downside runs from $42.50-$39.50; price last traded here between 9-16th February. LTC/USD had briefly consolidated within this zone before a further squeeze to the north occurred.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

 Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 126 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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