Kaspa - Possible Short Trade
In my previous TV idea, I entertained the bullish case for KAS. While I cannot rule out a bullish breakout, evidence for a double top formation and a consequent drop is piling up.
Pros:
1. Kaspa is holding above the 21D & 50D EMAs. As long as the daily TF is bullish, I cannot rule out continuation to the upside.
Cons:
1. Although Kaspa made a HH, The RSI was showing a bearish divergence.
2. The RSI is showing a sharp decline in momentum. IMO, it shows that traders and investors are reluctant to buy or enter a long trade at this level.
3. The daily chart also shows a bearish divergence on the RSI.
4. KAS broke an upward sloping trend line (daily and the 4H). In my trading system a violation of a diagonal trend line is serious because the diagonal includes two axis’ time, and price. In my experience, whenever an asset breaks a diagonal, you can expect a drop to the origin of the move (at least).
5. If traders and investors were eager to get into a trade on Kaspa, Friday’s (September
22nd) presented a perfect entry:
A SF candle with 21D EMA holding support followed by retrace to the 61.8% of the wick
and a move back above the 0.045 level. However, there was no follow through! KAS
cannot break above the 21 and 50 EMAs on the 1H
7. The 1H and the 4H already show a bearish cross (21 and 50 EMAs). A bearish cross is not
important in and of itself but, it indicates a direction, and the direction is likely lower.
8. IMO, break below the 0.045 level and the 21D EMA confirms a Double top pattern.
9. On the 1H Kaspa is compressing in a triangle pattern which suggests continuation down.
10. Bearish Divergence on the 1H also suggests that the most likely direction is lower.
11. A word of caution, Triangles are notorious for fake outs. For me, a triangle is just
confluence. I don’t enter trades on the breakout of or, a break down from a triangle.
Trade Idea:
• Entry: 0.444 (retest of the 21D as resistance)
• SL: 0.0474 (above the 21D and 0.045)
• Target: 0.0333 (possibly lower)
• TP:0.04 (demand zone), 0.0333
• R: R: 1: 3.83
NFA.
What do you think? Please share in the comments.
Best wishes
Pros:
1. Kaspa is holding above the 21D & 50D EMAs. As long as the daily TF is bullish, I cannot rule out continuation to the upside.
Cons:
1. Although Kaspa made a HH, The RSI was showing a bearish divergence.
2. The RSI is showing a sharp decline in momentum. IMO, it shows that traders and investors are reluctant to buy or enter a long trade at this level.
4. KAS broke an upward sloping trend line (daily and the 4H). In my trading system a violation of a diagonal trend line is serious because the diagonal includes two axis’ time, and price. In my experience, whenever an asset breaks a diagonal, you can expect a drop to the origin of the move (at least).
5. If traders and investors were eager to get into a trade on Kaspa, Friday’s (September
22nd) presented a perfect entry:
A SF candle with 21D EMA holding support followed by retrace to the 61.8% of the wick
and a move back above the 0.045 level. However, there was no follow through! KAS
cannot break above the 21 and 50 EMAs on the 1H
important in and of itself but, it indicates a direction, and the direction is likely lower.
8. IMO, break below the 0.045 level and the 21D EMA confirms a Double top pattern.
9. On the 1H Kaspa is compressing in a triangle pattern which suggests continuation down.
10. Bearish Divergence on the 1H also suggests that the most likely direction is lower.
confluence. I don’t enter trades on the breakout of or, a break down from a triangle.
Trade Idea:
• Entry: 0.444 (retest of the 21D as resistance)
• SL: 0.0474 (above the 21D and 0.045)
• Target: 0.0333 (possibly lower)
• TP:0.04 (demand zone), 0.0333
• R: R: 1: 3.83
NFA.
What do you think? Please share in the comments.
Best wishes
Commentaire:
Looks like a H & S in the making. This reaffirms my initial assessment
Transaction en cours
Trade fermée manuellement:
KAS found support at 0.041.
