STEEM is retracing through a significant support zone and currently testing trend line support. In a previous post, I coined the acronym "PATHWR" (Previous All Time High Wick Range), but the more I thought about the naming convention, I realized the terminology was slightly inaccurate.
I want to clarify and re-define these levels so that everyone who reads my posts can follow along and understand my references. For starters, I'm looking at daily candlestick charts ~ each candlestick represents the price action for one day. For more information on candlestick charting, click here.
Upon further review, I've decided to re-coin PATHWR to....
PWSH (Previous Wick Significant High)
The PWSH (Previous Wick Significant High) is defined as a range starting with the highest open or close price and extending up to the highest price of any given "significant" trading peak. Significance is subjective, but I define it typically as the first impulsive move of a trading pattern (e.g. the first wave of a triangle pattern). I've always looked at these zones throughout my trading career, but never had a reason to name these ranges ... until now.
With STEEM's breakout to start the year, a new PWSH (PWSH3) was created. This range is easily identified when looking at the candlestick chart. The lower range is right at $8 and extends up to the ATH of $9.25. I expect PWSH3 to act as resistance when we enter those prices again (hopefully in the near future).
Trendlines
In addition to PWSH (Previous Wick Significant High), I also use trend lines to identify additional levels of support and resistance. Technically, you only need 2 data points to draw a trendline, but the more points the trendline touches, the stronger the trendline. I've drawn 2 trendlines:
- One that connects to the lowest open/close of the trend ("Trend1" labeled on the chart)
- One that connects to the wick low of the trend ("Trend2" labeled on the chart)
Trend1 will be used to as a proverbial "line in the sand" for open and close prices. This trendline can be breached, but prices need to close above the line for the trend to stay in tact. Trend2 is a reference point for the lows, or the wicks of the candlesticks. If price action closes below Trend2 the trend could be broken and we could see further downside.
Ideally, I'd like to see STEEM bounce off Trend1, close above it, and trade back into PWSH1 and eventually breaking through higher. If we close below Trend2, I'll reassess.
Great post - looks like STEEM broke through one of the resistance zones today. Good sign for trending upward!
To the moon we go! Not quite, but very encouraging to see STEEM break through PWSH1. Hope to see STEEM push higher and test the resistance of PWSH3. Look for PWSH1 to provide support around the $5 level.
Thank you for the clarification
Hope this is helpful for identifying levels of support and resistance, mostly support in this bull market thus far.
Thank you @dirkboy41 for making a transfer to me for an upvote of 1.31% on this post! Half of your bid goes to @budgets which funds growth projects for Steem like our top 25 posts on Steem! The other half helps holders of Steem power earn about 60% APR on a delegation to me! For help, will you please visit https://jerrybanfield.com/contact/ because I check my discord server daily? To learn more about Steem, will you please use http://steem.guide/ because this URL forwards to my most recently updated complete Steem tutorial?
This post has received gratitude of 0.74 % from @appreciator thanks to: @dirkboy41.
You got a 0.93% upvote from @postpromoter courtesy of @dirkboy41! Want to promote your posts too? Check out the Steem Bot Tracker website for more info. If you would like to support development of @postpromoter and the bot tracker please vote for @yabapmatt for witness!
You got a 9.74% upvote from @mercurybot courtesy of @dirkboy41!
Sneaky Ninja Attack! You have been defended with a 2.44% vote... I was summoned by @dirkboy41! I have done their bidding and now I will vanish...Whoosh
This post has received a 2.2 % upvote from @boomerang thanks to: @dirkboy41