Compound (COMP) – Molding a fresh attempt to conquer the 23.6% Fibonacci retracement levelPosted on Thursday, July 28 2022 at 9:07 pm GMT+0000
Compound (COMP) has reversed higher after finding support near the 42.80 – 43.70 congested zone which managed to act as a solid base between June and July. The price is molding a fresh attempt to conquer the 23.6% Fibonacci retracement level of the April-June freefall.
The bullish crossover of the 20 and 50-day simple moving average is hinting at further positive developments in price action while momentum oscillators are also revealing cheering messages. The TSI is holding hand with its signal line in the positive territory and the -DI and the +DI lines of the ADX indicator are diverging and positively aligned, with the indicator itself holding some distance above 20.
For a more optimistic scenario to develop, buyers will need to secure a sustainable move above the 23.6% Fibonacci level at 61.28. such a move will pave the way to the 75.35 – 82.99 zone joining the mid-May highs and the 38.2% Fibonacci level. A bit higher, attention will turn towards the 50.0% Fibonacci level at 100.53.
Downside risks have eased but they have not been eliminated yet, and if the bulls surrender the battle around the 23.6% Fibonacci level, the 50-day simple moving average will attempt to delay the bearish pressures from snowballing in cooperation with the late-June low of 42.86. Following any dip below the latter, the bearish action could pick up steam towards the 18th of June bottom at 26.20, where any violation will further deteriorate the medium-outlook, shifting the spotlight to the 15.00 mark.
In brief, although Compound is showing a gradual improvement, traders may remain a bit cautious until the price successfully pierces above the 61.28 boundary. Failure to escape that crucial bar will raise concerns for a continuation of the medium-term downtrend.