We continue to be encouraged by the fact that price is still consolidating above 5150 $ within what is still an ascending triangle as we'll see below, although the bulls are running out of time considering other more bearish signals are emerging as well that could spell the end of this multi-week rally at any time. In fact, if the bulls don't move price convincingly to new local and regional highs before the end of the work week we think a retracement back well below [members-only content] $ is likely, if not more severe if the technicals turn truly ugly. Having said that, there is a lot of room between current levels and the last legitimate shorter-term higher low around [members-only content] $ so we continue to think that the bulls will emerge to establish yet another higher low when the inevitable selloff materializes (whether that be now or around [members-only content] $).
First up today is the 4-hour chart for a more granular view of the short-term setup where we can see that an adjusted form of the ascending triangle remains intact, in fact with more touch points this time, while price continues to consolidate within the lower supply area on [members-only content] signals and mixed candle formations which suggests more sideways action for now but with a [members-only content] bias moving forward. So do the flatlining but still bullish EMA's, the rising longer-term SMA's, and the still firmly bullish Ichimoku Cloud, although there appears to be the possibility of an ascending wedge in addition to the triangle which becomes the more likely pattern the longer the bulls wait to try to break 5350 $. If the market does indeed break higher before the end of the week then the triangle target would be above [members-only content] $, but if the wedge ends up materializing then a test of the [members-only content] $ region is likely the best we can hope for.
Moving on to momentum and volume, notice that Willy and RSI are still treading water just below overbought territory but have yet to really recharge much, the Stochastic has started moving noticeably lower but still has plenty of room to run, MACD is slowly bleeding further down below its zeroline, and PPO is still flashing weak sell signals, all of which favor a wedge breakdown in the not too distant future. So does the still very porous volume profile setup below [members-only content] $, which remains in need of more attention before a sustainable move up, however the strong A/D line and the weak sell volumes make us think that there are still bulls waiting to buy the dip even if the wedge does materialize so we're issuing a new VST ProTrade idea.
Next we'll zoom out to the 3-day chart for a broad view of the medium-term setup where we can see that price continues to struggle with the still falling 100 SMA, the lower supply area, the [members-only content] zone, and the bottom of the still bearish Ichimoku Cloud, so it comes as no surprise that the bulls are having trouble right now thus sparking rather bearish candle formations despite the [members-only content] signals. This hodgepodge of signals is not very helpful with directionality, and neither is the fact that the EMA's are still rising while the 50 SMA falls, so our longer-term forecast for a wide and extended consolidation between ~[members-only content] $ remains relevant despite near-term uncertainty. That said, recent price action continues to push us slightly in the [members-only content] camp for now so we'll continue to lean towards [members-only content].
As far as momentum and volume are concerned, notice that RSI is now joining the Stochastic in officially overbought territory while PPO continues to flash weak sell signals for the time being, neither of which is great news for the bulls, however Willy still has a tiny bit of room to run higher and MACD continues to move slowly above its zeroline which leaves room for a final leg up to the [members-only content] $ region if indeed the triangle is resolved to the upside. Additionally, exchange volumes remain quite encouraging and the A/D line is still rising, both supportive of the short-term bullish view, however volume profile leaves much to be desired between ~[members-only content] $ which suggests [members-only content] as previously mentioned.
While we currently have a foot in the bull camp we are certainly not committed to a side yet considering the odds of a breakdown from the forming wedge pattern are greater than [members-only content] and increasing with each passing hour that the bulls fail to act. Granted, both the triangle and the wedge must be resolved by the 12th of April or they will be void and the consolidation will continue, but we think there is a good chance that volatility picks back up before then which is why we are staying ready on both the long and the short side in key areas above and below the market in order to be ready for whatever outcome materializes over the coming days.