Compound (COMP) Price Targets 110% Increase After Clearing Long-Term Resistance

Key Takeaways

• Compound (COMP) validated the $85 horizontal area as support.
• The price could be trading inside a short-term symmetrical triangle.
• Will the Compound price break out, and what’s next if it does?

COMP has increased rapidly since the start of November, culminating with a high of $144 on Dec. 4. The price fell afterward, declining by 43% before bouncing and regaining most of its losses.

Compound created a lower high after the bounce and could be trading inside a symmetrical triangle. Will COMP break out, and what’s next if it does? Let’s find out.

COMP Breaks Out

The weekly time frame COMP chart shows that the price has increased alongside an ascending support trend line since June. More recently, it validated it in November (white icon) and accelerated its rate of increase.

Since then, COMP has created four successive bullish weekly candlesticks, culminating in a new yearly high of $144, the highest price in nearly two years.

This week, COMP validated the $85 horizontal area with a long lower wick (white icon). The next horizontal resistance is $240, 120% above the current price.

Technical indicators support the upward movement. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are increasing and above their bullish thresholds.

So, the weekly chart suggests the COMP price will increase toward the next resistance at $240.

Will COMP’s Increase Continue?

The daily time frame chart aligns with the weekly one, suggesting the upward movement will continue. The wave count suggests that COMP has completed wave four in a five-wave upward movement (black) by retesting the $85 resistance area.

While wave four is short duration-wise relative to wave two, it has already reached the 0.618 Fibonacci retracement resistance level, making it possible that wave four has ended.

If the COMP price consolidates more before breaking out, it could create a symmetrical triangle. The bottom will have been reached even in this possibility, though wave four will continue.

If wave five has 0.618 times the length of waves one and three combined, the price will reach a high of $241, aligning with the previously outlined long-term horizontal resistance area.

Even though the RSI is falling, it is above 50 and has generated a hidden bullish divergence (green). These are both signs that the upward movement will continue.

COMP Price to $210

The COMP price broke out from a long-term horizontal resistance area and validated it as support.

Long- and short-term readings suggest the correction is over, and COMP could increase to $210.