As you can see, NEO is in a , and the bears remain in control. Near the end of the recent sell-off, it broke down through the bottom of the channel, and found immense support at the 78.6% retrace. We can see that a crossover appeared on the , as price exploded higher into overhead resistance. As you can see, the midline of the has been very resistive, when NEO has traded under it. There were many occasions where NEO failed to rally above the midline, and that's where we are at this very moment. In addition to the clear resistive nature of this midline, we can see that there is a convergence of resistance here. Particularly, we have the 50 (in orange,) the 200 (in purple,) the 50% retrace, and the midline resistance. If you look closely, you can see that NEO is actually slightly above the 50 , and the 50% retrace, but the other resistance levels are just above. Looking at the , you can see that it has been falling during the entire advancement from yesterday's low, indicating a deceleration in participation. Here is where the HYPOTHETICAL visionary work comes into play. It is possible that NEO gets stopped by the resistance here, and reverses to form the right shoulder of a pattern (blue inverse arc.) You can see how the dashed black , could eventually become the neckline of such a pattern. Conversely, however, the current price action does resemble a . Ultimately, we need more data to know if an pattern is forming. This is purely a hypothetical assessment. With that said, if NEO turns lower, then we can watch to see if a right shoulder forms. A break above the midline, could slightly change this analysis.
On the , you can see that it's rising into falling resistance (orange dotted .) This tells us that the momentum may reverse, if the falling resistance is respected. That's perfectly inline with the hypothesis of a reversal to form the right shoulder of an pattern. You may be wondering why I'm anticipating the creation of an pattern, as opposed to just a lower high inside of the . Honestly, my intuition has manifested from other areas of the market. I see that many assets are trying to bottom here, so an would fit well with the bottoming market theory. However, THIS IS ONLY THEORY! Until we see more data on the chart, that confirms the formation of a right shoulder, this analysis is purely visionary. Usually, I reserve this sort of highly speculative analysis for my personal charting, but I've decided to share it with you, so that you can observe my methods. This is the same method that I used to project incomplete patterns in ETH, XLM , and others. When it all boils down, we're slamming into one of the strongest resistance levels on this chart — the midline. If NEO fails to surpass it, we could end up trading all the way back down to the pink , to potentially create the peak of the right shoulder. If this does end up being an pattern, it would likely lead to a breakout above the top of the . Stay on your toes traders! And good luck!
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