Cardano price may spike to $1.25 before finding resistance
|- Cardano price pulled back from the Wednesday rally to test the Tenkan-Sen and found buyers.
- Weekly candlestick set to close in the green/white for the first time in six weeks.
- Oscillators support a strong and responsive bullish bounce that could likely exceed $1.00.
Cardano price is not only on track to close its first green/white weekly candlestick in six weeks, but, depending on the trading activity for the remainder of the day, ADA may close the weekly candlestick as a Bullish Engulfing candlestick.
Cardano price could trigger an impressive weekly close if buying momentum remains strong
Cardano price is on track to complete a very bullish candlestick pattern. The Bullish Engulfing candlestick has several interpretations depending on the market. Still, in a nutshell, as long as the body of the current candlestick engulfs the body of the prior candlestick, it is considered a Bullish Engulfing candlestick. If the Bullish Engulfing candlestick appears at the bottom of a trend, there is a strong probability that the market may reverse. However, confirmation is still needed in the form of another candlestick. But the oscillators support a strong rally from these lows.
The Relative Strength Index has bounced off the first oversold level in a bear market, 30, pointing higher. Likewise, the Composite Index developed regular bullish divergence and is now at an angle that will cross above the fast and slow-moving averages. Finally, the Optex Bands are at all-time lows, warning that a bottom is likely in for Cardano price.
ADA/USD Weekly Ichimoku Kinko Hyo Chart
The $0.02 3-box reversal Point and Figure clears out a lot of the noise present on the Cardano price candlestick chart. Additionally, it helps confirm the Ichimoku analysis by positioning a new long entry opportunity.
A hypothetical long trade exists with a buy stop order at $0.88, a stop loss at $0.80, and a profit target at $1.22. The trade setup represents a 4.25:1 reward for the risk. A two to three-box trailing stop is an option and could help protect any implied profit made post entry.
ADA/USD $0.02/3-box Reversal Point and Figure Chart
The setup is invalidated if Cardano price drops to $0.74 before the buy stop is hit.
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