We can notice that the bullish momentum with the last upside has been dampened, for the reason that the white candle is represented by a high wave pattern. The shadows show an equilibrium among the bearish and bullish strengths.
Then, the gap up has been covered as quickly as possible: in this way, the following candle is a black candle that neutralized the previous candle.
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| Chart from Markets.com |
The chart shows also the FIBO retracements: 38.20% and 23.60% FIBO levels are respectively at the low of the black candle (see the gap down) and at the previous minimums.
At the moment, in order to set up a trading strategy, it needs to understand the market direction: the high wave could represent a trading range area; only with a break of the upper or of the lower limit (see the green and red arrows), we could set a bullish or bearish strategy.
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