Frax Share (FXS) Price Is Very Close To A Bullish Breakout, This Is A Potential Target
The Frax Share (FXS) price is currently trading within a long-term bullish pattern and reclaiming an important short-term level. A breakout above the pattern could lead to a strong price increase.
Descending Parallel Channel
The price of Frax Share (FXS) has been trading within a descending parallel channel since reaching a yearly high at $14.2 on February 9th. Although there have been a few instances where the price broke out of the channel, it formed long wicks and quickly returned inside the channel (red ellipses).
The descending parallel channel is considered a bullish pattern, often leading to breakouts in most cases.
Indeed, after breaking above the midline of the channel on July 3rd, FXS price has formed a higher low and is currently approaching the channel’s resistance. This is a bullish signal, indicating that the bulls are actively buying at lower levels.
The daily RSI indicator supports the continuation of the uptrend as it breaks above the declining resistance line and stays above 50.
Moreover, such breakouts in RSI often lead to similar breakouts in price action. Therefore, the FXS price is likely to break above the channel’s resistance ($6.9) in the near future.
If successful, it could target the pattern’s goal at $10.6, coinciding with the horizontal resistance area created on April 17.
Short-term Outlook
The 4-hour chart shows that the FXS price has recaptured the important short-term support level at $6.2. This is a bullish development that is usually followed by a strong rally. As a result, the FXS price has risen to the minor resistance at $6.6.
However, this move has pushed the RSI indicator into the overbought zone (red circle), signaling a potential short-term correction or consolidation.
Therefore, the FXS price may retrace back to $6.2 before rising to the next resistance level at $6.9.
Conclusion
The long-term technical indicators support the idea that FXS price will break above the descending parallel channel and rise higher. However, a short-term correction may occur before that happens.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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