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Buy These Stocks to Leverage Reversals

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Asian stocks mixed

The S&P 500 Index has been on a tear since November of 2016. While many investors remain bullish on the index, technical analysis reveals that bearish patterns are emerging. A correction in the coming weeks after a year of unstoppable growth should be healthy to sustain the uptrend.  Investors and traders are advised to be cautious, and watch their trail stops carefully as technical indicators show that the index is extremely overbought.

When the market is overbought, the strategy is to move away from stocks that have significantly moved up and favor names that are flashing signs of trend reversals. These stocks are most likely near strong support levels with tremendous upside. Here are two names following that theme.

AKAM – Akamai Technologies Inc.

AKAM has rallied from a major support level at 45 and is now looking to breach resistance at 54. The stock may still slide as 54 is a psychological resistance. When it does, look to pick up the stock as close as 52. This slight dip is ideal to prepare the name for a sustainable breakout. On the other hand, a breakout at 54 with a daily volume of at least 4 million should validate the move.

Initial target for the breakout is 64.

For long term investors, there’s an opportunity to make a considerable profit. AKAM has been on a corrective phase since August of 2015 when it hit the top if the range at 77. However, technical indicators show that the correction has come to an end and the stock is ready to resume the uptrend. A move above 54 with heavy volume supports this assumption.

Should the breakout happen, long term investors can hold on to the name and see whether it can break the major resistance at 77. The move up will attract momentum investors and take the stock to 157. This is a great opportunity to earn serious profits.

This view is valid as long as support at 45 holds.  

Weekly AKAM Chart

Weekly Chart AKAM

Monthly AKAM Chart

Summary of Strategy

Buy: Breakout at 54 with volume or wait for stock to slide at 50 – 52

Support: 52 first, 50 next, and 45 last

Resistance: 64, 70, and 77

Targets: 64 and 157

Useless: Only when support at 45 is broken

APC – Andarko Pete Corp.

APC is another name that has rallied from a major support level. The stock has been on a downtrend since September of 2014, but it is looking to reverse its fortunes soon. A bounce at 40 shows that the support level is being defended. Now, the stock is looking to breach 51 to continue its move up.

To sustain its momentum, APC must stay above 51 with 9 million in volume. Maintain this level and we get to 62 first and 65 next. Long term investors can hold to the name and see if it can break major resistance 71. If it does, the next target is 94.

This view is negated if the stock breaks major support at 40.

Weekly APC Chart

Monthly APC Chart

Summary of Strategy

Buy: Breakout at 51 with volume

Support: 48, 45, and 40

Resistance: 62 first, 65 next, and 71 last

Targets: 62 and 94

Useless: Only when support at 40 is broken

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.8 stars on average, based on 288 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: SelfKey

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We’ve been watching Selfkey (KEY/BTC) for some time now. It started to become interesting for us when bulls showed their hands on August 14, 2018. At that point, the market dropped to as low as 0.00000066. KEY/BTC generated a hammer candle with a long wick below the body, which indicated the rejection of lower prices. On the next day, August 15, Selfkey printed a large green candle that sent the market to as high as 0.00000112.

The price action told us that 0.0000007 is bull territory.

This happened again on September 12 when Selfkey touched 0.00000071. Bulls rejected lower prices and sparked a rally that saw the market climb as high as 0.00000154 on October 29. This is where bears showed their hand. They aggressively sold at these levels to drive the market down.

The price movement in the last few months has given us the confidence to enter the market.

Technical analysis shows that KEY/BTC is in sideways consolidation. Participants are accumulating positions as the market ranges between 0.0000007 and 0.00000116 with a midpoint at 0.00000093. With this range, we can easily buy the support and sell the resistance again and again until the market breaks out of range resistance.

The strategy is to buy as close to 0.00000067 as possible. We’ll buy below the range support because market makers may shake out bottom pickers. Ideally, what we want to see is a hammer candle and a retest of 0.0000007 support on the hourly chart. If we can get that, the market can easily rally to range midpoint of 0.00000093.

The process may take less than a month.

Daily Chart of Selfkey/Bitcoin on Binance


As of this writing, the Selfkey/Bitcoin pair is trading at 0.00000072 on Binance.

Summary of Strategy

Buy: As close to 0.00000067 as possible.

Targets: 0.00000093

Stop:0.00000065

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.8 stars on average, based on 288 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: Modum

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Our November 24, 2018 trade recommendation of Modum (MOD/BTC) hit its target on November 29 when the market went as high as 0.0001174. If you locked in gains at that price, your investments would have grown by over 35%. If you left a percentage of your investments to chase the next target, it would have increased by over 59% on December 7 from the original buy price.

Profits came fast and easy for Modum because the market structure is fairly predictable. We’ll take advantage of it as much as we can.

Technical analysis shows that MOD/BTC is still trading within a range. Recent price action has enabled us to better define this range. The bottom end of the range is 0.00008, the midpoint is 0.0001075, and the top is 0.0001354. Everything that has happened outside of this range since late July 2018 can be considered as a deviation.

When it comes to markets that are trading sideways, it is key to stay patient. Modum is currently correcting after briefly touching the range high. It even retested the range midpoint as a resistance on December 8. As long as Modum trades below the midpoint, the likelihood of revisiting the range low is high. Thus, set your bids and wait for the market to drop to 0.00008.

The strategy is to buy as close to 0.00008 as possible. If MOD/BTC continues to defend this support, then we can expect the market to once again move up to the range midpoint of 0.0001075. We suggest taking gains and closing most of your positions once the initial target is hit. Leave the rest for the possible run-up to the range high of 0.0001354

The process may take less than a month.

Daily Chart of Modum/Bitcoin on Binance


As of this writing, the Modum/Bitcoin pair is trading at 0.00094 on Binance.

Summary of Strategy

Buy: As close to 0.0008 as possible.

Targets: 0.0001075 and 0.0001354.

Stop:0.0000174

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.8 stars on average, based on 288 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: Golem

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Golem (GNT/BTC) came off lows of 0.00001803 on November 20, 2018. At that price, the market was down by over 80% from the 2018 high of 0.0000909. This is an immense drop.

An in-depth look, however, shows that the fresh yearly low was the result of a shakeout. At the end of November 20, the market closed above 0.000019, which is the parabolic support. The swing to the low price level and quick recovery of the support ignited a rally to 0.00002771 on December 3. On that day, the market printed volume that’s over 300% of its daily average.

While the heavy volume buzz should have been enough for a range breakout, GNT/BTC pulled back. It appears that the accumulation stage is not yet over. Nevertheless, we’ll take this opportunity to accumulate as well.

Technical analysis shows that GNT/BTC is still trading within the accumulation range of 0.00002479 and 0.000018. It recently breached the range midpoint of 0.00002151 so we’re fairly certain that the market is en route to the yearly low of 0.000018. This is where we join smart money investors.

The strategy is to buy as close to 0.000018 as possible. If GNT/BTC respects this support, we can expect a quick move up to range midpoint and initial target of 0.00002151. Feel free to lock in gains here. You may want to leave a small portion of the amount for the possible move up to 0.00002479.

The process may take less than a month.

Daily Chart of Golem/Bitcoin on Poloniex

As of this writing, the Golem/Bitcoin pair is trading at 0.00001903 on Poloniex.

Summary of Strategy

Buy: As close to 0.000018 as possible.

Targets: 0.00002151 and 0.00002479.

Stop:0.0000174

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.8 stars on average, based on 288 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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