Trade Recommendation: Gnosis
Gnosis (GNO/USD) is a market that is still in range accumulation. However, it appears to be generating a tradeable bullish higher low setup. We have this view because Gnosis has been range trading between $10 – $17 for about five months now. While the market temporarily pierced resistance of $17 from April 2nd – April 11th, the throwback drove the coin back to range accumulation. Nevertheless, the pullback gives us a chance to buy close to a key price area.
Technical analysis shows that GNO/USD is flipping resistance of $14 into support. We have this bias for several reasons.
First, Gnosis struggled for months to take out its resistance level of $14. It took the bulls four taps between December 2018 to March 2019 to drain this supply area. Now that the market is above the resistance, we can consider $14 as a durable support. So far, this technical concept is holding up.
For several weeks now, bears have been trying really hard to take out this support level. However, bulls are protecting their territory as expected. The long wick below the candles’ bodies on April 25th and April 30th shows the presence of buyers. Also, there’s a diagonal support that keeps the slightly bullish momentum alive. The fact that bulls are respecting it tells us that a local bottom is in place.
The strategy is to buy on dips as close to $14 as possible. If bulls can stay above this level, they will likely generate a rally to our targets of $17 and $20.
The process may take a month.
Daily Chart of Gnosis/US Dollar on Kraken
As of this writing, the Gnosis/US Dollar pair is trading at $14.43 on Kraken.
Summary of Strategy
Buy: As close to $14 as possible.
Targets: $17 and $20.
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.
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