NEO Technical Analysis, Elliot Wave, Fibonacci, RSI, MACD, patterns, and more.

Neo has been an interesting coin to trade. With the recent China news heavily impacting the price of NEO, the fate of NEO was left in the hands of other exchanges.

With Bitfinex adding NEO to their collection, it fell to a whomping $13.10 on September 22.

Now, let us back track to the moment this began on Septmeber 7th and catch up all those that would like a summary of when the big bang began on Bitfinex.

What we first see is massive panic, as coin holders unloaded frantically.

Next we see a consolidation period between Sept 15 and Sept 23

A bullish trend is considered an RSI range between 40 and 80
A bearish trend is considered an RSI range between 20 and 60

On Sept 23, we see the RSI bounce one more time off the 30 RSI and this is where the magic begins.

We see the price action consolidate, eventually breaking above the 55 EMA and hovering above it before a massive breakout. The RSI also has a bullish sentiment, hovering between bullish strength zones of 40-80, while the MACD diverges.

It is here after the 25th, we see a massive spike in volume, which is a strong indication that the Primary wave [1] has began.

The best rule applied is this when entering a breakout:

To those that entered this trade, congrulations. You did the right thing.
When is a good time to exit the trader?

Let’s take this a step further and evaulate what we see.

For more advanced traders, if you caught this cup and handle pattern, the best place to close the position would've been at the trend line where the cup and handle began. Then wait for a retracement of 0.382, entering the next break out.

Now we see Elliot Waves 1-5 forming Primary Wave [1]

Since EW 1-5 has been confirmed, we can assume ABC correction of Primary Wave [2] will form

Let’s break it down further. We know that within waves 1-5 of Primary wave [1], waves 1, 3, and 5 are motivate waves and waves 2 and 4 are corrective waves.

We can assume waves 1, 3, and 5, have 5 normal motive zigzag patterns, and waves 2, and 4, will have abc corrective pattern.

We can also assume with Primary Wave [2], there is ABC correction. Within wave A, there are 5 motive waves down, wave B, abc, corrective waves, and wave C, 5 motive waves as well.

Now that Primary wave [1] and primary wave [2] are complete, we are now on Primary Wave [3], waiting for a breakout.

Looking at the one hour chart, we see this is a strong possibility. There is always strong consolidation after a primary wave finishes it’s motive wave.

There is currently extremely low risk with a high reward possibility, entering between $29-$30 with a target of $36, with a stop loss below the supporting trend line

As we stand on the hourly chart, we’ve broken through the 0.236 fibonacci resistance area and are now fighting at the 0.382 fib resistance area.

Good luck. To all those that have entered this low risk high reward trade. Feel free to post any questions and I'll be happy to answer them.

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Disclaimer:

1. You enter the trades at your own risk
2. These are guidelines only