A lot going on with BLINK: hype, double top, and rising wedge
Hello my fellow trades and padawans of the markets. Pandemic, covid vaccines efficiently created in less than one year(!), riots in the capitol, Inauguration around the corner, stock market at ATH over and over again, BTC doubling its previous ATH... what a time to be alive! There is a lot going on in the world right now so let's take a deep breath and try to center ourselves so we can see what is going on in the markets with a little more clarity.
It is time to discuss BLINK, another darling of the EV ecosystem that saw its price grow exponentially over the past few months. I have been taking advantage of the large swings of this one and traded it for at least a couple of months now for very nice profit. I am bullish on this one long term but why not take advantage of the hype around it, right?
WHAT'S GOING ON RIGHT NOW?
As you can see on the chart, there is a lot going on. To make this analysis organized for you my dear padawans I will make a list of things to take into account:
BEARISH OUTLOOK
1. Rising wedge--bearish outlook in the short term or possible continuation
2. Bearish divergence between price and RSI
3. Possible double top--more downside needs to occur and a break below the confirmation line needs to happen to confirm this one. Volume decreased from (what would be) the left top to the right top, which is in line with the double top pattern
4. MACD above the 0 line but showing indecision (don't we see the same pattern on the price?) and curling down
5. +DI curling down and -DI curling up-- bullish outlook weakening and bearish getting stronger
6. ADX curling down and pointing to a weakening of the current trend
SHOULD YOU BE SCARED?
Well, most of these indicators and patterns point to more downside. However,
1. The price is now finding support around $47.7, which acted as strong resistance for a few days in the past couple of weeks.
2. Additionally, the 14=ema is right around that mark so there are two levels of support in confluence.
3. We could also throw the lower line of the wedge in there so there you have it: 3 levels of support really close to one another.
POSSIBLE (LARGE PICTURE) SCENARIOS
1. The double top is confirmed. According to Bulkolski, the average decline after breakout is 19%, which would send the price to around $29.5. Not coincidentally, that is where the price found resistance for a few days (then support for one day) before rallying 65% in 4 days--white circles on the chart (seriously, even if none of this happens this stuff still scares me sometimes). So be on the watch for all of that. You can throw fib retracement levels in the mix because the price may not go to $29.5 (although that would be within the average decline), so that you can find other potential entry points for the long term. If the price breaks below the wedge support there would still be the 21-ema to serve as support on the way down, so expect some price action there before getting to the confirmation line (price could also revert from there as it did in the past).
2. None of the above happens and price reacts from here. I am inclined to think not, but who knows for sure? If that happens, I would think the most logical (what? logical in the markets?) move would be some sideways consolidation after the second peak before a move up to re-test the top of the wedge.
That was a lot so take sometime to digest it before making any moves. Also, as you saw in the preface to this analysis, a lot is going on in the world right now. The Inauguration is certainly going to shake the nation. It could very well shake the markets. The bottom line is: monitor this one closely.
Thanks for reading another one of these long analysis. Be safe out there!
Safe trades!
Share the love:
If you get anything out of this TA, please like the chart so it moves up and others can benefit from my work. A simple click on the like button goes a long ways.
Follow for more:
I have an outstanding winning rate (check my other charts). If you want the best entry/exits just follow me, you won't regret. Thanks a lot!
***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
It is time to discuss BLINK, another darling of the EV ecosystem that saw its price grow exponentially over the past few months. I have been taking advantage of the large swings of this one and traded it for at least a couple of months now for very nice profit. I am bullish on this one long term but why not take advantage of the hype around it, right?
WHAT'S GOING ON RIGHT NOW?
As you can see on the chart, there is a lot going on. To make this analysis organized for you my dear padawans I will make a list of things to take into account:
BEARISH OUTLOOK
1. Rising wedge--bearish outlook in the short term or possible continuation
2. Bearish divergence between price and RSI
3. Possible double top--more downside needs to occur and a break below the confirmation line needs to happen to confirm this one. Volume decreased from (what would be) the left top to the right top, which is in line with the double top pattern
4. MACD above the 0 line but showing indecision (don't we see the same pattern on the price?) and curling down
5. +DI curling down and -DI curling up-- bullish outlook weakening and bearish getting stronger
6. ADX curling down and pointing to a weakening of the current trend
SHOULD YOU BE SCARED?
Well, most of these indicators and patterns point to more downside. However,
1. The price is now finding support around $47.7, which acted as strong resistance for a few days in the past couple of weeks.
2. Additionally, the 14=ema is right around that mark so there are two levels of support in confluence.
3. We could also throw the lower line of the wedge in there so there you have it: 3 levels of support really close to one another.
POSSIBLE (LARGE PICTURE) SCENARIOS
1. The double top is confirmed. According to Bulkolski, the average decline after breakout is 19%, which would send the price to around $29.5. Not coincidentally, that is where the price found resistance for a few days (then support for one day) before rallying 65% in 4 days--white circles on the chart (seriously, even if none of this happens this stuff still scares me sometimes). So be on the watch for all of that. You can throw fib retracement levels in the mix because the price may not go to $29.5 (although that would be within the average decline), so that you can find other potential entry points for the long term. If the price breaks below the wedge support there would still be the 21-ema to serve as support on the way down, so expect some price action there before getting to the confirmation line (price could also revert from there as it did in the past).
2. None of the above happens and price reacts from here. I am inclined to think not, but who knows for sure? If that happens, I would think the most logical (what? logical in the markets?) move would be some sideways consolidation after the second peak before a move up to re-test the top of the wedge.
That was a lot so take sometime to digest it before making any moves. Also, as you saw in the preface to this analysis, a lot is going on in the world right now. The Inauguration is certainly going to shake the nation. It could very well shake the markets. The bottom line is: monitor this one closely.
Thanks for reading another one of these long analysis. Be safe out there!
Safe trades!
Share the love:
If you get anything out of this TA, please like the chart so it moves up and others can benefit from my work. A simple click on the like button goes a long ways.
Follow for more:
I have an outstanding winning rate (check my other charts). If you want the best entry/exits just follow me, you won't regret. Thanks a lot!
***The ideas shared here are my opinion, not financial advise to place trades. Please do your own research before buying/selling stocks***
Comment:
On the verge of breaking below the trendline.
Comment:
Trend line holding like a champ:
Comment:
Double top on the way?
Comment:
$BLNK double top printing like magic!
