On the last update we talked about Steem approaching it's 200 day moving average and the significance of that. 

At the time Steem was peaking just above it's 200 day moving average intraday, but closed below that line by the time the candle officially printed. 

At the time it was stated that when a price reaches a significant moving average (like the 200) after trading below it for so long, it is often met with some resistance and a couple day pull back is to be expected. 

Flash forward to today, and we have seen exactly that. 

The price is currently sitting around the $.74 USD mark and has retraced quite a bit off it's recent high. Now the question on everybody's mind...

What does Steem do next?

That is the $64 thousand dollar question!

Luckily for us we can make some educated guesses using some technical analysis. Again, technical analysis is not a crystal ball and it only works slightly more often than it doesn't work. All it gives us is the history of the price and offer some possible support and resistance areas based on it's trading history.

As the saying goes... "price often has memory" and "history tends to repeat itself".

Something like that...

To help us get a clearer picture lets go to the charts.

The first chart I would like to look at is the one I have been talking most about in the last couple days. 

The Daily Chart.

The following is a Daily Chart (where each candle stick represents 1 day's worth of trading activity). It shows the trading in Steem since it's inception just over one year ago:

If you look real close in the far right corner of the chart you can see how the price briefly peaked above that 200 day moving average (pink line) before being slammed back decidedly below it. The price has continued to slowly make it's way downwards ever since. 

As of writing this Steem is currently sitting at $.75 USD.

So far there is nothing in that daily chart that is of great concern. In fact the price has reacted more or less how one would have expected it to. A pull back from the 200MA after making such a ferocious move up to meet it. 

Ideally, we would like to see some form of support here over the next couple days before we would say it is a good spot to buy. There hasn't really been a show of that support just yet, but it is still early in the pull back process. 

The simple fact that the price hasn't completely cratered after such a sharp rise is good news in itself. 

Now, if the price is making just an ordinary pull back before resetting and going higher does that mean this is potentially a buying opportunity?

I can't answer that for everyone, but for me personally I see the possibility of a trade setting up. 

If we zoom in a bit and take a look at this 30 minute chart showing the last week of price action, we start to see the possibility of an entry point. 

The price is hovering near it's lower bollinger band and has retraced about half of it's move up. Which is often a support area. 

For those reasons, and the ones mentioned above, this might turn out to be a loading zone for steem. I am not ready to call it one just yet as there has been no confirmation of the price trying to go higher, but it definitely is on watch as a potential loading zone.

Some other tidbits to keep in mind...

I don't have the data to back this up specifically, but if you go back and look through the last couple months of trading activity, I have noticed that we often make our lows for each week on Thursdays (today). In my opinion, that likely has to do with the a large number of steem being sold (on the open markets) from power downs that take place on that day. 

Again it doesn't always work out like that and I don't have the data to back that up any more than just a simple observation on my part. So, take that for what it's worth or you can totally disregard it. Up to you. :) 

A big part of Steem's move was cryptocurrency wide. Meaning, they all went up together. Steem likely will need some of that to return for the price to go higher at his particular time. I personally don't think the crypto euphoria is over just yet. 

Also, keep in mind that this giant price rise could have caught a lot of people off guard that were locked up in Steem Power and they are just now starting their powerdowns after the big move up. That supply hasn't hit the market yet and could in the next couple of days. Which could throw any TA out the window...

So, be aware of that also if you are going to be doing any buying around these levels. 

In Conclusion:

I tend to think this couple day pullback that we are currently experiencing is healthy and expected. If we are to continue higher, we likely need to hold up in this area over the next several days though. 

My thoughts are that after the couple day pullback is over, Steem will again start a move back up. Potentially breaking it's previous recent highs. 

Disclaimer:

*This is not investment advice or trading advice. These are merely my thoughts and what I am thinking could possibly happen.

*If you are simply a trader, make sure you set a stop loss and follow your specific trading plan.

*I am a long term investor in Steem and would like to see it move higher so I tend to be optimistic in my views. 

Follow me: @jrcornel