After taking hits on Chainlink for 2 long setups, we are expecting a bounce from the $16. We are in a bearish trend, on a lower time frame, but on a higher time frame, we are still bullish. At this level of $16, support level, seems to a strong catalyst for a mere bounce up for 25% or even more. As the market has tested the resistance at 19, we are anticipating this level to be broken out for a further up bullish leg.

At the support level, the retracement level of 75-78.6% is at the support level, which indicates a confluence level. This confluence will be strong to push the market up.

The descending trendline has been broken out for buys and is validated by the price action. This price action needs to be retraced given the trendline structure of impulse and corrective move. After the breakout buy, the trendline has been retested as well. Therefore, the validation is complete.

EMA 50 is in a bullish trend where as EMA 200 is still bearish. It needs to be noted that the death cross is still bearish. At the resistance level, EMA 200 may be retested or broken. At the support level, we might see a confluence of the support level with EMA 50. Therefore, giving us another factor to include in our long position.

Both the oscillators are in a bullish region right now, dropping down from the over bought region. Oscillators need to be neutralized at the support level where our long positions are anticipated. Either market falls in the over sold region and forms a bullish divergence or reverts back from the neutralized levels.

As the market has retested our previous resistance, we are anticipating a further leg above the current resistance level.

Don't miss the Chainlink

Feb 08 2022

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