Stellar (XLM) Price Reaches New Yearly High — Rally Far From Over
What's Next for XLM After New Yearly High? | Credit: Hameem Sarwar
Key Takeaways
- Stellar (XLM) broke out from a long-term resistance trend line.
- The XLM price trades inside a long-term horizontal resistance.
- Will the XLM price clear this resistance or will it fall instead?
The Stellar price has increased rapidly since the start of September. The XLM upward movement culminated with a new yearly high of $0.255 on Nov. 18. The increase caused a breakout above several critical resistances, taking the price to the long-term horizontal resistance of $0.250.
Will the XLM price break out above this resistance area, and what’s the next target if it does? Let’s find out.
XLM Price Breaks Out
The weekly time frame XLM chart shows a breakout from a descending resistance trend line that existed for 483 days. Last week, the price created a bullish engulfing candlestick with a magnitude of 90%. It has continued to increase this week.
During the breakout, Stellar’s price also moved above the $0.148 horizontal resistance area, which has existed since June. The XLM price reached a new yearly high today, Nov. 18.
The XLM price currently trades inside the long-term horizontal resistance area of $0.25. A breakout from this area could accelerate the increase and take XLM to the next resistance at $0.400. This is the final resistance area before the 2021 high of $0.797.
Technical indicators are bullish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are increasing and above their bullish thresholds.
While the indicators are overbought, no bearish divergence has been generated yet.
What’s Next for XLM?
The 3-day wave count shows that XLM has also broken out from an ascending parallel channel that existed since the start of 2023. This suggests that the upward movement is impulsive rather than corrective.
Therefore, XLM may be in wave three of a five-wave increase (white). Since wave three has extended, the sub-wave count is in black.
If the count is accurate, XLM is in sub-wave three of wave three. This is often the sharpest portion of the upward movement, explaining XLM’s parabolic rise.
A closer look at the sub-wave and minor sub-wave (yellow) counts implies the increase is not over. Rather, the likely future outlook is for the XLM price to break out from the $0.250 area, validating it as support and then increasing toward the next long-term resistance at $0.40.
Afterward, the XLM price could begin a lengthy correction, retracing a portion of the entire movement that started in September.
Breakout Incoming
The XLM price has tripled in value since its September lows.
The wave count and price action suggest the price will move above the $0.250 horizontal resistance area and validate it as support. Then, the next resistance will be at $0.40.
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