Ethereum - Head and shoulders potential pattern.

21 de jan. de 2019

I have a potential head and shoulders pattern on the horizon that could play out with a very good risk to reward ratio short upon a neckline break, or $104 support breaking for a more conservative trade. I will only short this on confirmation of support breaking. Of course I will scalp the $100 physiological number where one would expect at least some defence by the bulls should support go. This is also so coinciding with an Elliott Wave count I have for Ethereum where we will come down to at least the 0.618 Fibonacci level ($111) where I will take profits again as the $100 and $110 regions are both support. I must add that I am trading this more off the pattern than the EW count as if we hit target the ABC would be giving back more or less 100% of the move, and the labelling of the waves will be readjusted (Something I will be doing as we move along in real time). There are plenty of opportunities on Ethereum for longs on the way down, but if we break support with volume I will be taking very big short positions on this coin. Of course we have not broken neckline support yet, so the RR for a long at the moment is good on the other end of the spectrum, and should Ethereum break up from here I will be laddering into this coin for a new trade setup. I will hold swing positions and simultaneously scalp this on another exchange should we break down.

The volume profile for me is not the best, but we do have more volume on the on the advance of the left shoulder than the head. One would need an increase in volume to come with a break of the neckline and lower support in order to obtain confirmation.