LTC Update 12 January

G'day!

With BTC pushing up nicely following our recent BUY recommendation, let's have a look across at Litecoin to see how this market is faring.

As ever, we'll start with a chart:

In our first look at LTC, back on 5-6 January we identified $27.90 (Gox) (and $31.35 beyond it) as key resistance moving forward, and $21.46 as key support below the market.

Incredibly, within 24 hours of submitting this post the market had tested all three of these key levels. This means that had you followed our advice and sold at $27.90, then bought back at $21.46, you'd currently be sitting on a tidy profit of $4.50 per coin having endured no 'heat' whatsoever.  Not bad ;-)

Also, do you see how the the confluence of horizontal and rising support combined to arrest Litecoin's fall?  This tells us that the smart money was waiting for this correction to start accumulating more coin - and it is a very bullish indicator.

Since then, buyers look to have continued accumulating against rising support and as a result we're now trading back above the short term inflection point of $24.65; another bullish indication.

While it wouldn't surprise us to see LTC dip back to re-test @24.65 as support, every indication is that we are firmly established in a renewed rally which has the potential to re-test $27.65 once the momentum traders give up holding out for a better entry price.  And if we power through $27.90, as we did at the last attempt, $31.35 will again hove into view.

So, what would shake our bullish conviction?  Well, a sharp move back below $24.65 would certainly grab our attention and a deeper sell-off to below $21.46 would challenge LTC's virtuous long-term uptrend meaningfully.

That's all we have for now but we'll keep you updated as the situation develops.

Rob @ BitScan