Trade Recommendation: TRON
TRON (TRX/USD) printed a fresh yearly low of $0.0111 on November 25, 2018. At that price level, the market lost over 89% from the 2018 peak of $0.10041. What’s even scarier was that TRON had no known support below $0.011. That makes bottom picking the market very tricky.
Fortunately, TRON generated a higher low of $0.012229 on December 7. With a higher low in place, the market rallied and recovered key support of $0.016. The recovery of this support was bullish. It sparked a strong rally to our range high of $0.0243 on December 24.
With these strong bullish moves, TRON grew by over 120% in less than a month. That’s why we believe that it is due for a considerable pullback. That’s when we can enter the market.
Technical analysis shows that TRX/USD is en route to our range support of $0.016. This view comes after the market respected our range resistance of $0.0243. On December 24, TRON printed a gravestone doji, which is a bearish candle. It indicated the emergence of sellers at current levels.
On top of that, the market is currently overbought on the daily RSI. This technical indicator must cool down to keep TRON’s ascent sustainable.
The strategy is to buy as close to $0.016 support as possible. If TRON wants to keep its bullish momentum alive, staying above this level would send the right message. It should set the market up for the formation of the right shoulder of an inverse head and shoulders pattern. At the same time, it will give the RSI time to cool off.
If bulls hold our range level, the market will likely rally back to $0.0243. The process may take a month.
Daily Chart of TRON/US Dollar on Bitfinex
As of this writing, the TRON/US Dollar pair is trading at $0.019947 on Bitfinex.
Summary of Strategy
Buy: As close to $0.016 as possible.
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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