XLM price aims for bullish breakout to $0.40
- XLM price action has been on the ascent since the correction on September 7.
- Buyers are showing themselves in the price action with higher lows and higher highs.
- Price action squeezed against the descending side of the triangle looks ready for the breakout to the upside.
Stellar (XLM) is making a solid partial recovery and looks to fully recover from the crash on September 7. Price action has already recovered 50%, and bulls are charging for recovering the other half. Although still stuck in a bearish triangle, bulls are flocking together for the overhaul.
XLM price is grouping and building momentum
Stellar’s recovery has been a quick one. On September 8, already a third was recovered in the opening of that trading session after XLM had shed 37% of its value. Since then, buyers could count on the $0.30 level that originates from June 20 and has shown its importance on several occasions on both the downside and the upside. It looks to be in play again in the price action for Stellar. Buyers scooped up XLM in two solid tests of support at $0.30. Since then, XLM is slowly but surely trading higher with higher lows and higher highs.
In its way, for now, is the red descending trend line from September 10. Bulls got rejected at session’s high that day, and price action bounced off the green ascending trend line. This way, a bearish triangle is formed with a $0.30 support level as the base and the red descending trend line on the descending side. Price action is getting brushed against the descending side and looks ready for the pop higher.
XLM/USD daily chart
Expect Stellar after the break to go for a retest of the green ascending trend line. As that line already showed its resistance, expect sellers to stand ready to block any attempts from bulls to break above it, though sellers might be in a bit of trouble there. As that green ascending trend line is not that far off $0.41, expect bulls not to book any profits until they reach that level. This will wash out any sellers and clear the path for $0.41, even $0.42 in a quick hit-and-run.
Should sentiment roll over in the markets for Stellar and turn toward risk-off, expect a trend down toward $0.30. Sellers will squeeze buyers out of their longs and go for a run of the stops buyers placed below $0.30. Once that happens, buyers will not be present until $0.26, where the monthly S1 support level is yet to prove its support and importance.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
