Smooth Love Potion (SLP) Bounces After Dropping To New Monthly Low
Smooth Love Potion (SLP) has created a bullish pattern inside a horizontal support area. It is likely to bounce as a result.
SLP has been falling since reaching a high of $0.04 on Feb 10. After a decrease and bounce, the price created a lower high on April 4 (red icon) and resumed its descent. This led to a low of $0.0153 on April 18.
The price has been moving upwards since, after bouncing at the $0.0165 horizontal support area.
Relative to the price on March 14, this created a double bottom, which is considered a bullish reversal pattern.
However, due to the lack of a significant bounce, the pattern has not been confirmed yet.
Double bottom pattern
A closer look at SLP readings from the daily time frame does not reveal a clear direction for the trend. While the RSI has generated a slight hidden bullish divergence, which is a sign of bullish trend continuation, the rest of the readings are neutral.
The RSI is very close to the 50 line and the MACD is close to 0. Both of these are considered neutral readings, failing to support the hidden bullish divergence.
However, the six-hour chart is more bullish. It shows pronounced bullish divergences in both the RSI and MACD (green lines). Also, both indicators are moving upwards. These readings support the possibility of a bounce.
If SLP does bounce, the first resistance would be at $0.022. This is both the 0.5 Fib retracement resistance level and a horizontal resistance area.
SLP wave count analysis
Technical analyst @cvotrades stated that the price is completing an A-B-C corrective structure towards $0.011.
The movement since Feb 10 does look like a completed A-B-C structure (red), in which waves A:C had a 1:0.618 ratio. This is the second most common ratio in such structures.
If accurate, this would mean that SLP will now initiate a significant upward movement, continuing the increase that transpired in early Feb (highlighted).
If so, SLP could potentially increase all the way to $0.045. The target is found by using a parallel channel to the Feb highs and lows, respectively.
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