ZRX ready to rocketI have been monitoring ZRX for long time and covered some of the short-term trades before, but now I’m more interested in the long run as we might have a bullish reversal which could bring higher prices.
Looking at a chart from NOV 18 to MAR 19, you can see the price made lower lows while RSI made higher highs – I marked the pattern with arrow and blue vertical lines. Now, let me explain RSI indicator first, before going into details.
RSI is an extremely popular indicator that has been featured in a number of articles, interviews and books over the years. It is a momentum oscillator that measures the speed and change of price movements. I use it often to identify divergences.
Divergences signal a potential reversal point because directional momentum does not confirm price. A bullish divergence occurs when the underlying security makes a lower low and RSI forms a higher low. RSI does not confirm the lower low and this shows strengthening momentum. The opposite of that would show bearish divergence.
ZRXUSD made bottom twice and from there made higher highs all the way to the corner of descending triangle. The gap from the triangle could be very powerful, given the fact we have vitnesed long bearish trend. I’m long on the trade and looking at $0.5 as my first target. I will cover the trade when we get the momentum going – first we need to see a clear break from $0.4 region.
