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Investment Recommendations May 10th

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DAX: Short-Term Sell (Update)

DAX, 4-Hour Chart Analysis

The German Index remains very close to its post-election highs just above the 12,750 level, although it failed to make progress in recent days. The benchmark is still clearly in overbought territory, and slightly above the upper boundary of its dominant advancing trend channel, pointing to a correction in the coming days. Our recommendation remains intact with the stop-loss level above the 12,800 level and the initial target zone between 12,400 and 12,500. The MACD is close to providing a sell signal at overbought levels.

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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4.6 stars on average, based on 380 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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5 Comments

  1. MSNP05

    May 10, 2017 at 5:42 pm

    How to short sell a stock if I have not bought any ? Sorry for such basic question 🙁

    • Mate Cser

      May 10, 2017 at 5:50 pm

      Hi great question don’t worry 🙂
      Stock indices likd tvs DAX, S&P 500 are very easy to short on the most platforms (usually through CFDs, but that doesn’t matter for you) you just simply sell them when you don’t have an open position.

      Same goes for the biggest stocks. Smaller stocks might be trickier and sometimes costly,but I don’t recommend shorting smaller stocks as a beginner anyway.

      If you have a question regarding a specific platform, I am here to help 🙂

      Good trading!

  2. MSNP05

    May 10, 2017 at 5:58 pm

    Can I use fidelity or robinhood to short DAX? And your other recommendations. It would be nice to have a video tutorial on this. Thank you for teaching me.

    • Mate Cser

      May 10, 2017 at 6:53 pm

      I will look into those two brokers and get back to you with the best options soon!

    • Mate Cser

      May 11, 2017 at 1:47 pm

      So a quick update on shorting the indices and trading the recommendations:

      The S&P 500 is easy you can simply by the short-S&P 500 ETF with the ticker SE, or short sell the ticker SPY (this doesn’t work at Robin Hood).

      The DAX is trickier, as there is no short ETF so the only option with stocks is to short-sell the ticker EWG.

      Gold: the ticker GLD tracks the price of gold, you can buy and short sell it.

      Oil is harder to track precisely with stocks, the best way is to use the ticker USO which tracks WTI Crude.

      As Fidelity and Robin Hood doesn’t offer futures or currency trading, you won’t be able to trade commodities or currencies directly just through ETFs. Might be worth considering a broker with a more wide selection of assets (Interactive Brokers or TD Ameritrade for example). A good resource for trading ETFs is this website.

      Let me know if you need any more information!

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Trade Recommendation: Loom Network

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The Loom Network/Bitcoin pair (LOOM/BTC) dropped to as low as 0.00001001 on August 14, 2018. At that price, the market lost almost 88% of its value from the 2018 peak of 0.00008199.

Like we’ve seen in many altcoin cases, LOOM/BTC started to bottom out after suffering tremendous losses. This process is always difficult to time, especially if the market has a price history of fewer than six months. However, we can always rely on reversal structures to see if the bottom is already in place. We’re seeing LOOM/BTC mark its bottom as well as end its downtrend using a reliable reversal pattern.

Technical analysis shows that LOOM/BTC has taken out resistance of 0.000019 on October 10, 2018. This triggered the breakout from the double bottom structure on the daily chart. The pattern tells us that the support area of 0.00001 has been created and has completed the retest. The creation of this support attracted bargain hunters and bottom fishers. This generated the momentum needed to breach resistance of 0.000019.

The breakout looks convincing as well. On the day of the breakout, LOOM/BTC generated volume that’s over 428% of its daily average. This suggests that the fear of missing out is creeping in. Participants are buying at a higher price in massive numbers. This is the state of mind that ignites powerful bull runs. 

The strategy is to buy on dips as close to 0.000018 as possible. The market is still close to overbought territory, which tells us that it may go below the breakout. As long as LOOM/BTC stays above 0.000018, it has the momentum to rally to our target of 0.000028.

The process may take more than a month.

Daily Chart of Loom Network/Bitcoin on Binance

As of this writing, the Loom Network/Bitcoin pair is trading at 0.00001962 on Binance.

Summary of Strategy

Buy: On dips as close to 0.000018 as possible.

Target: 0.000028

Stop: 0.0000175

 

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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ 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: NEO

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On our August 29, 2018 trade recommendation, we anticipated NEO/Bitcoin (NEO/BTC) to breakout from the large falling wedge on the daily chart. We emphasized the importance of buying only after the pair generates volume of 1 million NEO units. Without heavy volume, the breakout would not look convincing to breakout traders and trend followers. Hence, there wouldn’t be enough momentum to ignite a massive rally.

Though NEO/BTC broke out from the falling wedge as expected on August 31, the volume it printed was way below our requirements. As a result, the breakout rally was short-lived since bottom fishers saw the low volume breakout as an opportunity to take profits. The selling drove the market down. Nevertheless, this gives us a chance to buy the bottom before NEO/BTC takes off.

Technical analysis shows that NEO/BTC is respecting the historical support of 0.00245. This view comes after the pair successfully completed the retest when it dropped to as low as 0.00239 on October 15 but bulls came to the rescue and lifted the market above the support. We watched NEO/BTC from that point to see if the support will hold. The confirmation came on October 18 when volume suddenly surged. This was a signal that participants are comfortable accumulating at this level.

More importantly, the daily RSI appears to have printed a new higher low at 32.6. This is an encouraging sign as it shows that participants are no longer waiting for extreme oversold readings before entering long positions.

The strategy is to buy as close to 0.00245 support as possible. As long as the market remains above this level, it has a very good chance to rally to our initial target of 0.0034 and then 0.0046.

The process may take more than a month.

Daily Chart of NEO/Bitcoin on Binance

As of this writing, the NEO/Bitcoin pair is trading at 0.002574 on Binance.

Summary of Strategy

Buy: As close to 0.00245 support as possible.

Target: 0.0034 first and then 0.0046.

Stop: 0.00234

 

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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ 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: Litecoin

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The Litecoin/Bitcoin pair (LTC/BTC) dropped to as low as 0.00758498 on September 12, 2018. At that price level, the market was down by almost 70% from the 2018 peak of 0.02499999.

If you’ve been following our trade recommendations, you’d probably know that we like picking altcoin pairs that have suffered heavy losses. That’s because these pairs often have great bottom picking setups. More importantly, the bottom provides the maximum financial opportunity. We’re seeing that shape up in LTC/BTC.

Technical analysis shows that LTC/BTC is carving a bottom at 0.0082 support. While the pair is still trading inside a descending channel, we’re confident that it will break out of the pattern soon. We have a couple of technical reasons to support our view.

First, we can see multiple supports converging at 0.0082. We have the parabolic support, the uptrend support, and then the support of the descending channel. The convergence tells us to expect significantly increased demand at this level.

In addition, LTC/BTC is oversold on the weekly chart. Add the selling relief from oversold conditions to the surge in demand and we might see a breakout real soon. This is something that we’ve already seen in other altcoins such as XRP/BTC and XMR/BTC.

The strategy is to buy as close to 0.0082 support as possible. As long as the market stays above this level, it has the momentum to ascend to our target of 0.0115 first and then 0.014.

The process may take more than a month.

Daily Chart of Litecoin/Bitcoin on Poloniex

As of this writing, the Litecoin/Bitcoin pair is trading at 0.0082053 on Poloniex.

Summary of Strategy

Buy: As close to 0.0082 as possible.

Target: 0.0115 first and then 0.014.

Stop: 0.0078

 

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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ 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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