NEO price shows signs of recovery after 86 days of correction

NEO price has been trading inside a descending parallel channel for the past 86 days. After breaking above the short-term resistance, NEO attempted to reclaim the midline of the channel but failed.

NEO bounces off support

Technical analysis from the daily timeframe shows that NEO has been trading below the long-term horizontal resistance zone at $15 since February 2023.
This zone has rejected the price multiple times, most recently on January 1, 2024. The decline peaked with a low of $9.80 on January 23. NEO price bounced back after that and moved higher since then (green icon).
The daily relative strength index (RSI) offered mixed results. Traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.

NEO/USDT Daily Chart | Source: TradingView

A reading above 50 and sloping up shows that the bulls have the advantage, while a reading below 50 shows the opposite. Even though the indicator is rising, it is still below the 50 level. Additionally, the bearish divergence line is still intact (blue line).

Break out of the short-term resistance line

The six-hour timeframe shows that NEO has been trading inside a descending parallel channel for the past 86 days. These channels often contain corrective movements, which means it often leads to a breakout.
NEO price bounced off the channel support line on January 23 (green symbol). Despite breaking above the short-term resistance line, it was rejected by the middle line of the channel (red circle). The six-hour RSI legitimizes a short-term breakout as it rises above the 50 level.
Furthermore, the wave count shows that the W-X-Y correction is complete. Technical analysts use Elliott Wave theory as a method to identify long-term price patterns and investor psychology, helping them determine the direction of a trend.
If NEO price breaks above the channel's midline, it could rally 30% to the resistance line at $14.80.

NEO/USDT 6-hour chart | Source: TradingView

Despite this bullish prediction, a drop below near-term resistance could send the price down 13% to the channel's support line at $9.80.