Namecoin is in the midst of a sine wave formation, starting late last week, with a relatively long wavelength, albeit a smaller frequency.
Let’s take a look at the NMC/USD hourly chart below (click to expand):
I’ve performed the Fibonacci study from the year low at 1.342, until the current high at 1.953.
We can see how price retraced to the 61.8% Fib level at 1.575, before hiking again.
Right now price is located at 23.6%, circled in blue. However, look at the Awesome Oscillator, it’s been green for over twenty bars, without any interruption – a good sign of strong bears. So even though the Accelerator Oscillator might be red, and the Stochastics might be in an overbought territory, it’s doesn’t necessitate that the Awesome Oscillator shall follow suit. Often used as a confirmation of a trend, the Awesome indicator is very useful in telling us the momentum of the trend, as opposed to the Stochastics which relies on fixed points. The disadvantage of using fixed point indicators such as Stochastic or Relative Strength Indicator is that when strong trends occur, they can be pretty useless.
So given the momentum displayed by the Awesome (marked with a blue arrow), we may indeed see price increase further, where a potential double top could form.
In such a scenario, we’d have to observe price action at the time to see whether the double top shall come into fruition.
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