Trade Recommendation: Stellar
Our April 24, 2019 trade recommendation for Stellar (XLM/USD) hit its initial target. Those who followed the trading plan grew their investments by over 40% when the market climbed as high as $0.14099 on May 15th.
Just like our previous trade recommendations we mentioned in recent articles, the second target still applies. However, we must adapt to the current bullish environment and maximize gains. Stellar is looking really strong and it appears ready to break out.
Technical analysis shows that Stellar/US Dollar is breaching resistance of $0.136. A complete annihilation of this level would trigger the breakout from an inverse head and shoulders pattern. The breakout will signal the end of the Stellar’s year-long bear market.
Also, it is important to note that the daily RSI is trading near oversold conditions. If Stellar is to make a move, bulls must be willing to punch through RSI resistance of 70 and possibly go in extreme overbought territory.
Fortunately, other technical indicators favor bulls. The 50-day moving average (MA) is about to cross above the 200-day MA. This golden cross is one of the most reliable signals that the market is turning bullish. This pending crossover plus the possible breakout make us believe that Stellar is about to launch a massive rally soon.
The strategy is to buy at the breakout and retest of $0.136. As long as bulls keep this level, XLM/USD will likely rally to our targets of $0.162 and $0.20.
The process may take a month.
Daily Chart of Stellar/US Dollar on Bitfinex
As of this writing, the Stellar/US Dollar pair is trading at $0.13822 on Bitfinex.
Summary of Strategy
Buy: Breakout and retest of $0.136.
Target: $0.162 first and then $0.20.
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.
Featured image courtesy of Shutterstock.