Trade Recommendation: NEM
NEM (XEM/BTC) has been flying under the radar since it generated a yearly low of 0.00001254 on September 12, 2018. From that point, it range-traded between 0.00001325 and 0.00001760 until November 21. On that day, the market quietly broke out of the range high. However, the break out was not pushed by heavy volume. As a result, NEM pulled back to as low as 0.00001622.
If NEM was like most altcoins, the move below the range high would have meant a nosedive to the bottom of the range. Good thing it wasn’t the case, as bulls clawed their way back to recover 0.00001760 on November 26. With this price action, NEM suddenly turned bullish.
Technical analysis shows that XEM/BTC reversed its trend as it broke out of an inverse head and shoulders pattern on the daily chart. Once the resistance of 0.00001760 was finally taken out, NEM rallied to as high as 0.00002164 today, December 8.
At this price point, however, XEM/BTC is starting to look weak. We can see a bearish divergence on the daily RSI. In addition, volume was on a decline during this rally. Price cannot continue its rise if bulls are exhausted and volume is anemic. That’s why it may be a good idea to wait for a pullback before entering.
The strategy is to buy on dips as close to 0.00001760 as possible. If the market can defend this support, it will likely gather the momentum to move to our initial target of 0.000025. Take that out and 0.00003 is next.
The process may take a month.
Daily Chart of NEM/Bitcoin on Binance
As of this writing, the NEM/Bitcoin pair is trading at 0.00002076 on Binance.
Summary of Strategy
Buy: As close to 0.0000176 as possible.
Target: 0.000025 and 0.00003.
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.