How To Trade $LUNA

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Coinmonks

4 min readMar 16, 2022

I first started sharing about $LUNA here. The main purpose of the article was to talk about trendline. I started it in January and then wrote a follow up on February. 2 months later, I am still here updating the chart based on the drawn trendline. Follow me for more chart analysis.

I must remind you that this is not financial advice. Everything shared here is for education only. Be sure to do your own research before investing in any coins/tokens. It is important to DYOR based on your personal circumstances.

Using the same trendline drawn on January, I just extend it to the latest price action. Let’s get right into it.

If we see a bounce soon, I would personally target the price to hit the down trendline. But if the $ cannot stay above EMA200, I will not touch it. It probably will continue to go down if it lose the EMA200 support.

That was my comment in February. I drew the down trendline in February as $LUNA was forming lower high and lower low. Of course if it breaks the down trendline, an upward move is to be seen. And this has happened.

Let’s take a much closer look on the daily $LUNA chart.

To explain this better, I divide it into parts.

a) The price maintain on EMA200(pink line) support for almost a month. Volume gets smaller during this period. The price action has also become less volatile. If you look at the Bollinger Band, it gets narrower. Usually this would signal breakout, but we never know if the $ will explode to the upside or the downside. So it is always best to set stop loss near the lower Bollinger Band! Remember to manage your risk well.

b) When the $ breaks out of the upper Bollinger Band, we now can confirm that this is an upside breakout. As soon as it breaks the down trendline, the $ rally to the main trendline as this was the next resistance to be tested.

c) The main trendline is now the resistance. $ manage to break it on the second move. But the volume and $ shows divergence here. Refer to the arrow in the chart below.

The $ is moving up but the volume is decreasing. This is a bearish divergence. Few days after the move up, the $ drops back to the trendline on March 7. Confirming the bearish divergence earlier. $ manage to hold the trendline as support and bounce back to hit a new ATH.

Note that:

This could be a double top if $ failed to break the new ATH. The green line is now the current resistance for $LUNA.
$ need to hold the main trendline as support. If fail, you need to look for the watch for next support. Which is around $75–78.
The Bollinger Band is getting narrower again. Which mean the price is about to explode. But to which direction?
$ is above both EMA50 & EMA200. This is good. This is bullish.
You need to watch the formation of higher high/low or lower high/low to check if the trendline is still valid.

Remember, DYOR. I am sharing my analysis here for education only. If this benefits you in any way, do hit that CLAP button. Do comment if you have anything to add/ask/discuss. I am happy to talk about charts all day long!

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How To Trade $LUNA

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Written by Farhana A.