The Swipe (SXP) price has broken out from a descending resistance line but has yet to move upwards significantly as a result of the breakout.
Despite this, the outlook remains bullish and SXP is expected to soon accelerate, possibly after completing a short-term pattern.
SXP Breaks Out
On Nov 3, SXP reached a local low of $0.69 after an extended move to the downside that began on Aug 13.
SXP reversed its trend shortly afterward and is currently trading below the resistance area of $1.10.
Technical indicators in the daily time-frame are bullish, supporting the continuation of the upward move. The Stochastic oscillator, MACD, and RSI are increasing. Furthermore supporting the bullish scenario, the Stochastic Oscillator has made a bullish cross and the RSI is above 50.
If the price breaks out above the current resistance area, the next resistance would likely be found at $2.38, the 0.382 Fib retracement level.
A closer look shows that the price has already broken out from a descending resistance line. While the first two attempts at breaking out were unsuccessful and left long upper wicks behind (shown with red arrows below), the third was successful, reaching a close significantly above the resistance line.
Therefore, even though SXP is trading inside a horizontal resistance level, the bullish close suggests that it will be successful in breaking out and will move towards the next closest resistance area.
The two-hour chart shows that SXP is trading inside a symmetrical triangle. Even though this triangle is normally considered a neutral pattern, due to the bullishness from long-term time-frames, a breakout is expected.
If one occurs, it would likely be the beginning of the move that takes the price towards higher resistance levels. Technical indicators support this possibility since both the MACD and RSI are increasing and are above 0 and 50 respectively.
A decrease below the most recent low of $0.979 (red line) and the support line of the triangle would invalidate this possibility.
Cryptocurrency trader @CryptoTony_ outlined an SXP chart, stating that the price has begun a bullish impulse and will likely increase towards $2.
The longer-term count suggests that beginning on Aug 5, SXP had completed a bearish impulse (shown in blue below). A corrective structure is expected to follow.
The shorter-term chart supports this scenario, as it would create a W-X-Y corrective structure.
While the exact sub-wave count inside the triangle is not yet definite, projecting the length of wave W to the breakout level would give a high of $1.47, giving us an initial target for a breakout.
The SXP price is expected to break out from its current short-term symmetrical triangle and begin moving towards $1.48 and the next resistance area at $2.38.
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