Key Takeaways
The daily chart shows POL’s recent price actions, including completing a five-wave impulse followed by an ABC correction.
Price action signals a potential reversal on the more petite time frame because a new five-wave impulse appears to have started.
The daily chart shows POL completed an (a-b-c) correction within a descending flat triangle. The correction began after a completed 5-wave impulse, with wave (v) peaking at $0.76 on Dec. 3.
The current price is testing the prior resistance for support at $0.42 and is hovering slightly above it.
POL rose from Nov. 4 at a low of around $0.30, with its first wave (i) peak at $0.44 on Nov 12. To wave (5), it continued rising by 70% more, racing to a high of $0.76 in December by its end.
The daily Relative Strength Index (RSI) shows neutral movement, which signals that the price is struggling to gain momentum for a breakthrough above the descending flat.
POL is currently at a pivot point as it could also revert to the lower boundary of the horizontal zone around $0.30.
On the 1-hour chart, POL appears to have ended its ABC correction since December’s high to a low of $0.41 on Jan 13. The following 25% rise could have indicated the start of a new 5-wave impulse, with wave (i) completed at the upper boundary of the descending flat at around $0.51
It was followed by a corrective wave (ii) that retracted to the $0.42 level (prior resistance), which is currently testing the horizontal level for support.
POL is at a pivot point. In a bullish scenario, it shouldn’t go lower than the prior low, or it will invalidate the projected five-wave impulse outlook. If it does find support, we expect wave (iii) to proceed with the upward momentum past the descending resistance and to a target of $0.60, as projected by the Fibonacci extension level of 1.618.
The RSI on the one-hour time frame shows neutral and slightly oversold conditions, at 44, signaling that a recovery is more likely from this point on.