After a long downtrend, 20 EMA (on the graph in ORANGE) shows signs of a possible uptrend.
FACT:
1. 20 EMA shows an uptrend
2. Resistance and support converge in the next few weeks
3. There are 3 ways of going after convergence:
a) above support
b) bellow resistance
c) between support and resistance
PROGNOSIS AND ACTIONS:
Depending on the case as follows
3a Price above support (UPTREND) go LONG (BUY)
Next Resistance depicted in RED DASHED LINE
3b Price bellow resistance (DOWNTREND) go SHORT (SELL)
Next Support depicted in GREEN DASHED LINE
3c Price between support and resistance (SIDEWAYS) NO ACTION
Most likely we will see case 3A. That is the reason why this is a LONG prognosis.
FACT:
1. 20 EMA shows an uptrend
2. Resistance and support converge in the next few weeks
3. There are 3 ways of going after convergence:
a) above support
b) bellow resistance
c) between support and resistance
PROGNOSIS AND ACTIONS:
Depending on the case as follows
3a Price above support (UPTREND) go LONG (BUY)
Next Resistance depicted in RED DASHED LINE
3b Price bellow resistance (DOWNTREND) go SHORT (SELL)
Next Support depicted in GREEN DASHED LINE
3c Price between support and resistance (SIDEWAYS) NO ACTION
Most likely we will see case 3A. That is the reason why this is a LONG prognosis.