One of the best cryptos today is NEM, which starts the European session with a 5% upswing. In our opinion that does not change the negative sentiment towards this instrument. Actually, such an upswing is just an invitation to go short with a better – higher price. Before we will start the analysis of this instrument, let me show you what we wrote about the NEM on the 16th of August:
„XEM created an inverse head and shoulders formation, which can be a start of a nice bullish reversal. The formation is not active yet and for the proper buy signal, you need to wait for the breakout of the neckline (black). Unfortunately for the buyers, this scenario is less likely to happen. „
That is why you always need to wait for the breakout. In this case, the price continued the down trend and instead of the iH&S ended up with two flag formations (green and blue). Currently, we are in the second flag and it seems that we are getting closer to the ending, which should result with a breakout. According to the price action rules, the breakout should be to the downside. As long as we are inside of this pattern, we need to be patient but the breakout of the lower line of this pattern will be a strong sell signal.