- Elrond took out a critical profit level to the upside.
- The net port of call is $200, which has not been tested since May 12.
- Expect some sideways action between a bandwidth of 22%.
Elrond (EGLD) was on a rampage on August 30. After sellers seized control of the price action on August 20, buyers came back with a vengeance and ran the stops that sellers had placed just above the high of August 30.
Even after that, the price has been trading higher, but a little bit of cautiousness is needed as a double top looks to be forming at $185. The danger lies here that buyers will wait to add to their long, and price action could start pairing gains and turn into losses with a retest of $161 as a result.
Elrond buyers need to add some fuel to the fire to get to $200
On the other hand, a pullback would not be so bad, as long as that $161 level still gets respected and shows support. To the upside, the $200 marker is going back to May 12 and price action has not been up here for almost half a year. Expect a lot of resistance from sellers who will have this level lined up for their entries. A little bit further above, at $207 EGLD has the top from May 6 and at $210 the monthly R1 resistance level for September. Once through the $200 barrier, a few heavy hitters are lined up to keep price action muted from any further upside.
EGLD/USD daily chart
To conclude, from a buy-side perspective, either buyers step in now to run price action further up and hit that $200 level within a weekor they wait for the retreat to $161 to enter there, with probably more volume lined up and a better risk-reward.
For sellers, the message instead looks like waiting for signals on that double top formation at $185 or being patient for the $200 level to be hit. This could even be an excellent fade-in trade for shorting, between $200 and $207, with a stop tucked away above the monthly R1 resistance at $210.
