Theta price faces magnet effect, which could propel it higher
|- Theta price emerged from an ascending triangle on March 17.
- Measured move target projects another 13% in gains.
- Intra-day weakness seems to be temporary.
Theta price has stalled in the past six hours, but the weakness does not diminish the bullish outlook. The measured move target at $9.80 and the important $10 level remain within the advance’s grasp.
Theta price aims higher
Monroe Trout, a successful hedge manager, liked to trade the ‘magnet effect’ - markets’ tendency to get to round numbers. It proved to be a highly profitable strategy for Trout, and it has proven valuable on many different financial markets, whether it be equity indexes, individual stocks, or currencies.
During the five-day symmetrical triangle formation, only two of the 18 down candlesticks were on above-average volume on the 4-hour chart. Such market behavior demonstrated that the notable rally in Theta during 2021 is far from being a pump-and-dump story.
Today’s intraday weakness is simply a technical reaction to the slight overbought condition on the Relative Strength Index (RSI). After releasing some of the pressure, Theta will likely advance to the measured move target of $9.80, representing a gain of 13% from the current price level.
Investors must be prepared for the magnet effect to come into play, which will lift THETA to $10. The more patient traders may be rewarded with a test of the 2.618 Fibonacci extension level at $11.
LINK/USD 4-hour chart
If the intraday weakness accelerates, the first support is the symmetrical triangle high at $8. The next important level is the 50 four-hour simple moving average (SMA) at $7.30. It provided support on March 17, right before the breakout.
A more dramatic decline will take Theta price down to the low of the symmetrical triangle at $6.20.
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