ATOM price gives bears knee-jerk reaction as bulls plan counteroffensive back to $12

• Cosmos price sees a surprise uptick in the ASIA PAC session on Thursday.
• ATOM is primed for another leg higher as bears exit their positions.
• Expect to see an important reentry in the pennant formation with a test at $12 this week. 

Cosmos (ATOM) price action has stocked up bulls this week and sees them charging against the bearish force that ran price action from $12 to $10.80 since Monday morning. Bulls are finally waking up and are interested in buying ATOM at the current discount, paring back some losses in the process. Expect to see the knee-jerk reaction from earlier in the ASIA PAC this Thursday to become the first stepping stone that will push Cosmo's price up to $12 again.

Cosmos price could see this week turning flat if bulls can pull it off

Cosmos price saw a substantial leg higher on Thursday in the ASIA PAC session, where bulls finally were able to trigger a substantial move up. With that move, the highs of earlier this week got broken and in the process have triggered quite a few stops from bears. This opens up more room to the upside with less resistance from short-sellers as a two-tiered return could easily bring ATOM back to $12 and have it erase all losses for this week.

ATOM first will face $11.40, which comes in at the green ascending trend line. Breaking above that level means that bulls re-enter the pennant formation that has been playing out on the chart over the longer term. Once above there, the moving averages will be near $11.60, which remains the last challenge before bulls can tick $12 at the upper red trend line of the pennant and book 10% in the process.

ATOM/USD  4H-chart    

Downside risk comes in the form of a false bounce and bigger decline, which would bear a 10% drop alongside it. ATOM would still make its way up to $11.40, get a rejection against that green ascending trend line and make a nosedive landing next. If that story plays out, expect the low of this week at $10.80 to be tested and quickly broken with the target at $10.20 –the low of last week – as the end of the line in the decline for now.