ENJ Technical Analysis: Bears Exit Triangle To Challenge $0.40

Key technical points: 

Past Performance of ENJ

As mentioned in a previous article, the ENJ price action shows a symmetrical triangle pattern in the daily chart. The recent rejection from the 50-day SMA results in a reversal from $0.57 to create a double top pattern and the triangle fallout. However, the neckline of the double top pattern at $0.47 remains a crucial support level, and the breakout will lead to the downfall to $0.40.

Source- Tradingview

ENJ Technical Analysis 

The ENJ price shows a falling trend in the trading volume during the bull cycle to the opposing SMA representing a weakness in the underlying bullishness. Hence if we see a rise in trading volumes during the $0.47 breakout, traders can expect a high momentum correction phase, potentially breaking under $0.40. The vertex indicator shows the VI lines giving a bearish crossover indicating a trend reversal in the technical chat. Therefore, the technical indicator supports the idea of a double-top formation leading to a bearish phase.

The stochastic RSI indicator shows the K and D lines failing to sustain in the overbought territory leading to a bearish crossover and a new bear cycle. Moreover, the bearish divergence in the double top formation is pretty evident in the K and D lines. In a nutshell, the ENJ technical analysis warns the bullish traders to wait for a better buying opportunity as the downtrend may form a new bottom support level.

Upcoming Trend 

If the triangle breakout rally gains momentum, the ENJ prices will drop below the $0.47 neckline resulting in the double top pattern fallout. Hence the traders can expect the falling prices to challenge the bottom support at $0.40 with a high likelihood of a fallout.

Resistance Levels: $0.50 and $0.57

Support Levels: $0.47 and $0.40