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Trade Recommendation: Bitcoin Cash

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Bitcoin Cash has been on the receiving end of the bears. From its highs of $4139.0893 on December 20, the cryptocurrency plunged about 81% by February 06. This shows the kind of damage the decline has done to the buy and hold investors.

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Key points

  1. Bottom fishing is seen in Bitcoin Cash.
  2. It is likely to change its trend from down to range bound.
  3. Buy $1,400, SL $1,100, target $1,896 and $2,070

However, smart investors start cherry picking when others sell in a panic. We believe that Bitcoin Cash is showing signs of bottoming out, hence, is worthy of a buy.

Daily chart

In the short-term, Bitcoin Cash is trading inside the descending channel. In the long-term, the cryptocurrency has a stiff resistance at the downtrend line. Additionally, it has stayed below the 20-day EMA since January 16. All these point to a strong downtrend.

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However, the bears could not build up on the breakdown of the critical support at $854. Though prices fell to a low of $778.2021 on February 06, it quickly rebounded about 79% to $1392.5405 on February 10.

Since then, the virtual currency has been trading inside a tight range. This is unlikely to continue for long. We expect a large range move to the upside that will propel the BCH/USD pair above the critical resistance zone, which has a confluence of resistance from the 20-day EMA, the downtrend line and the resistance line of the descending channel.

Once above this zone, a rally to the 50-day SMA of $1,896 and above it to $2,070 is likely.

Therefore, we suggest initiating long positions on a breakout above $1,400. The stop loss for the trade should be kept at the recent lows of $1,100. Traders should avoid purchasing below the specified levels.

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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4.7 stars on average, based on 9 rated postsRakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.




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8 Comments

8 Comments

  1. Brentc

    February 13, 2018 at 10:54 pm

    Rakesh, I love your analysis on everything but wouldn’t it be risky to buy anything right now just for the fact prices for alt coins hinge on what btc is valued at? Btc/bch/ltc/eth and the rest of them all trading similar to btc. Unless btc breaks out everything is risky unless there is a flippining to a different coin. What’s your thoughts?
    Thanks

    • Rakesh Upadhyay

      February 14, 2018 at 4:50 am

      Hello Brentc,

      You are correct. Considering that the cryptocurrencies are in a downtrend, it is risky to buy anything now.

      However, it is unlikely that a direct correlation of Bitcoin and altcoins will remain for long. The markets usually fall in two phases.

      1. The first phase is when bitcoin falls and drags the whole crypto universe along with it. We have seen this phase play out.

      2. The second phase is when bitcoin remains in a range or declines gradually, but selective altcoins outperform. We believe that as long as Bitcoin remains above $7500, this phase will play out.

      Therefore, we have recommended Bitcoin Cash above $1400, when it will turn positive in the short-term.

      At the bottoms, the markets are always uncertain, therefore, the position sizes should be reduced.

      With warm regards
      Rakesh Upadhyay

      • Brentc

        February 14, 2018 at 3:02 pm

        Thanks rakesh. You nailed Litecoin big time by the way thanks

        • Rakesh Upadhyay

          February 15, 2018 at 1:33 pm

          I sometimes get lucky, Brentc

  2. emceeanders

    February 14, 2018 at 6:16 pm

    Rakesh would you suggest waiting until the day closes above $1400 or just buy as soon as it hits?

    • Rakesh Upadhyay

      February 15, 2018 at 1:35 pm

      Hello emceeanders,

      The problem with Bitcoin Cash is that when it rallies, it doesn’t give us a second chance to buy it again. It just jumps. As the stop loss is not very large, I recommend buying it after waiting for a 4-hour period. If prices sustain above $1400 for 4-hours, please buy it.

      With warm regards
      Rakesh Upadhyay

  3. dopezone

    February 16, 2018 at 10:39 am

    Guess we are on! Goggogogoooo Rakesh you better be right. I know where your house lives.

    • Rakesh Upadhyay

      February 16, 2018 at 11:00 am

      Hello dopezone,

      Yes, we are on. Let’s see if we get the move to $1820, where you can book 50% of profits and hold the rest with a trailing stop, targeting $2070.

      With warm regards
      Rakesh Upadhyay

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Trade Recommendation: AUD/INR

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The Australian Dollar/Indian Rupee pair (AUD/INR) ignited its bull run in September 2010 when it breached resistance of 42. This activated the cup and handle reversal pattern on the weekly chart. The breakout attracted trend followers and breakout buyers. The increased buying activity sparked a run that saw the market climb to 62.419 in September 2013. In three years, the Australian Dollar grew by over 48% against the Indian Rupee.

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At this price point, the market flashed bearish signals. A bearish divergence was spotted on the weekly RSI. Also, bulls failed to close above 60.00 on the weekly and monthly charts. This indicated that bulls were exhausted. Those who understood these signals took profits.

The heavy selling pressure drove the pair down to support of 54 in January 2014. While AUD/INR managed to bounce, it could only go as high as 57.553 in August 2014. The lower high killed the market’s bullish momentum. This triggered a selling frenzy that activated the head and shoulders pattern on the weekly chart. As a result, the market plummeted to 45.847 in October 2015.

The pair has been rallying since. This could be your chance to buy the breakout.

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Technical analysis show that AUD/INR is looking to take out resistance of 51.60. This comes after the pair generated a series of higher lows with the most recent one at 48.388 in December 2017. The breakout would trigger the huge ascending triangle pattern on the weekly chart.

The strategy is to buy the breakout at 51.60. As long as bulls stay above 51.00, they have all the momentum they need to climb to our target of 57.60.

The process may take more than six months.

Monthly Chart of AUD/INR

As of this writing, the Australian Dollar/Indian Rupee pair is trading at 51.215.

Summary of Strategy

Buy: Breakout at 51.60.

Target: 57.60

Stop: Close below 50.

 

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 168 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: Gifto

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The Gifto/Bitcoin pair (GTO/BTC) started to look bullish on January 3, 2018 when it took out resistance of 0.000025. This activated the small rounding bottom pattern on the daily chart. Also, the breakout attracted a lot of momentum that skyrocketed the pair to 0.00007499 on January 12. In a little over a week, the pair rose by almost 200% in value.

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At this price level, the market flashed bearish signals. First, the market was extremely overbought. Also, a bearish divergence can be spotted on the RSI. Plus, the market has grown so fast in a short time frame. Savvy traders who bought the breakout saw these signals, so they took profits.

The heavy selling drove the market back down to support of 0.000028 on February 2. From there, GTO/BTC rallied back to 0.00007 resistance on February 15. Once again, the pair succumbed to selling pressure as it dropped to the 23.6% Fibonacci level on March 7. While the pair broke the support of 0.000028 on March 29, bulls came to the rescue and pushed the market close to 0.00007 resistance on May 3.

Technical analysis reveals that GTO/BTC is locked in wide range between 0.000028 – 0.00007. Bulls come out when the market hovers around the 23.8% Fibonacci level. On the other end, bears flex their muscles at the 78.6% Fibonacci level. We’ll follow their lead to generate a profitable trade.

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The strategy is to bottom fish the market and buy as close to 0.000028 as possible. If bulls preserve this support, the pair will likely move back to resistance of 0.00007. However, it would be best to start taking profits at the 78.6% Fibonacci level or 0.000058. Charts show that bulls have a hard time going above this price area.

The process may take a month.

Daily Chart of Gifto/Bitcoin on Binance

As of this writing, the Gifto/Bitcoin pair is trading at 0.00003418 on Binance.

Summary of Strategy

Buy: As close to 0.000028 as possible.

Target: 0.000058

Stop:  0.000026

 

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 168 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: Intact Financial

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Technical Overview

  • Since double-bottoming in 2008 and 2009 at $26 (violet horizontal trendline in Figure 1), Intact Financial (IFC.TO) has enjoyed a four-fold increase. During the 2013, 2016 and 2018 corrections, the stock found support at a long-term trendline (support – green trendline; retests – green arrows).

Figure 1. IFC.TO Weekly Chart

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  • Zooming in, after topping in November’17, IFC completed a H&S pattern (tops – yellow ellipses, neckline – yellow trendline in Figure 2).
  • In January, March, April, and May, all up-moves halted at a well-defined short-term resistance (red trendline). Yesterday (May 25), the stock managed to break and close above the resistance.
  • Today, the stock closed in positive territory, whereas the Financial sector (TTFS.TO) declined by over 0.5%.
  • The $95 level had served as support on multiple occasions in 2018 (purple horizontal trendline and arrows).

Figure 2. IFC.TO Daily Chart

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Implications

  • The bounce off of the long-term support and the break above the short-term resistance are considered constructive.
  • The stock is expected to find support in the $95 – $96.50 range during pullbacks (i.e. at the red and purple trendlines).
  • The downward target from the H&S pattern was nearly met during the May decline (target – $92.25 – white vertical trendline in Figure 2, May 9 low – $92.65 – last purple arrow).

Outlook

  • Short-term bullish as long as the stock remains above $95
  • Long-term bullish as long as the stock remains above its long-term support (green trendline in Figure 1).

 Trade Recommendation

  • Buy the stock at current levels ($97.50 at EOD on May 24).
  • Target: Half at $101 (the January low which served as resistance in March – second red arrow). Other half at $108 (origin of the late 2017 decline).
  • Stop: Half upon a close below $95. Other half upon a close below the long-term support (currently at approximately $93.50).

Disclosure: No position yet but may initiate at any time. Will likely recommend the stock to my clients as a potential play within the financial sector.

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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4.8 stars on average, based on 12 rated postsPublished author of technical research. In his work on price “gaps”, published in the 2018 International Federation of Technical Analysts’ Annual Journal, he developed a new technical tool for analyzing and trading the “gap” phenomenon – the “K-Divergence” (http://ifta.org/public/files/journal/d_ifta_journal_18). Besides obtaining a Master in Financial Technical Analysis, he has completed a BBA and an MBA from the Schulich School of Business in Toronto and has completed all exams for the CFA, CMT and CFTe designations. Currently, providing research to investment management and financial advisory firms. http://www.linkedin.com/in/konstantindimov




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