Elastic Reversal After Bullish Divergence

On the 29th of May, Elastic has established the low at $0.21. At the same time bullish divergence was formed on the RSI oscillator and price started to move up. Today XEL/USD broke above the 50 Moving Average, followed by the breakout of the descending channel.

Recent price action suggests that Elastic is reversing to the upside. The strong resistance area is seen at $0.4, that is confirmed by two Fibonacci retracement levels. 23.6% and 76.4% Fibs.

Price could consolidate for a little while, getting down to the 50 Moving Average, but the trend now seems to be bullish. Nevertheless, break below the $0.21 support, would invalidate bullish outlook.

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