Trade Recommendation: Eidoo (EDO)

Eidoo

Eidoo (EDO/USD) is a market that looks ready to break out of range accumulation. We have this view because the crypto token has been trapped in base building mode for over eight months now. Throughout this period, Eidoo has been trading between a wide range of $0.60 and $1. Recently, the cryptocurrency has shown signs of strength, which is why we’re interested in it.

Technical analysis shows that EDO/USD is positioning to take out range high of $1. We have this view for several reasons.

First, EDO/USD has briefly breached the range resistance of $1 on June 18, 2019. However, bulls failed to convert the former resistance into support. As a result, the market is back trading inside the range.

The good news though is that Eidoo has managed to stay above the range midpoint of $0.80. With this move, the cryptocurrency appears to have established a bullish higher low setup to form the right shoulder of an inverse head-and-shoulders pattern.

Lastly, the range high of $1 has been tapped three times this year. This supply area is almost drained. Thus, we believe the next leg up will likely take out the resistance for good.

The strategy is to buy on the breakout and retest of $1 as support. As long as EDO/USD trades above this level, it will likely rally to our target of $1.20. Take that out and $1.40 is next.

The process may take more than a month.

Daily Chart of Eidoo/US Dollar on Bitfinex

Eidoo crypto chart
As of this writing, the Eidoo/US Dollar pair is trading at $0.8657 on Bitfinex.

Summary of Strategy

Buy: On the breakout and retest of $1 as support.
Target: $1.20 and 1.40.
Stop: $0.96 after the breakout.

 

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.

Kiril 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 funds, as he does his own crypto research and is a Product Manager at Mitre Media. 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.