Some idea on fake breakout

17 May 2018

When PA broke through the red resistance with significant volume, it seemed obvious the HNS target would be met.
The neckline was even confirmed as support on a first attempt to break below.
But the leading diagonal was getting to close to the apex to reach that target...

Right now I see a similar pattern, with an almost perfect head and shoulder top.
But It's target would be below the historical support TL for Iota, which call for caution.

The upper band of the downtrend channel (of the current correction) hasn't be tested a resistance since the low.
PA is now right above the neckline.
Which is also fib 0.5, and that's a common correction target for leading diagonal.
To be honest I'm expecting a lot of short to be pilled up there, waiting to be triggered.

There is two support line in blue underneath, those would be good to watch for reversal.
One also match the fib 0.236

But in between is the Daily SMA 100, called the mother of bubble for a reason.
If we are effectively in a new bull market, seeing PA reverse there would be a very good sign.
What's more is the position, right below that neckline
I wouldn't be surprise if PA were to fakeout the neckline to turn right back up there triggering so many stop loss.
Just like we had on top.
Personally i would only short on a clear break of this SMA and not on the neckline.

18 May 2018

Not

Here is one of those volume spike, so far preceding reversal.
Wonder if this SMA gonna hold H1 view :

18 May 2018

Not

Here is that divergence on macd and RSI
We still need a higher high to confirm
Looking at orange target
And if confirms as support next one in purple

19 May 2018

Not

Since the bottom we had an other LD, with flat top at 1.77
It corrected to fib 0.5
This could now be labelled as i and ii
Despite turning the overhead resistance back into support PA still has to break out of the baseline in black
and of the orange descending TL