Trade Recommendation: VeChain

VeChain (VET/USD) is a market that has given us a clearly defined range. It all started on March 12, 2019 when VeChain breached resistance of $0.0053. This triggered the breakout from an Adam and Eve double bottom on the daily chart. The breakout sparked a strong rally that sent VET//USD to as high as $0.008539 on the same day.

While the market immediately pulled back and even dipped below $0.0053 on March 13th, bulls quickly recovered the support. They even managed to start another rally that sent VeChain to $0.0082012. At that point, VeChain was already showing bullish exhaustion, which is why the current correction is not surprising. However, this dip offers us a chance to buy close to the range support.

Technical analysis shows that VET/USD is enroute to support of $0.0053. We have this view as VeChain lost control of our range midpoint of $0.0069. Below this level, the next reliable support is the range low of $0.0053.

The good news is that the 100-day moving average (MA) is crawling around that level. It will act as an additional support to help keep VET/USD above the range low. Also, bulls had to tap $0.0053 as resistance three times before taking it out on March 12th. Now that the market is above $0.0053, we can expect bulls to defend it with all their strength.

The strategy is to buy on dips as close to $0.0053 as possible. As long as VET/USD trades above this level, it will likely rally to our initial target of $0.0069. Take that out and the next target is $0.0085.

The process may take less than a month.

Daily Chart of VeChain/US Dollar on Bitfinex

As of this writing, the VeChain/US Dollar pair is trading at $0.006147 on Bitfinex.

Summary of Strategy

Buy: As close to $0.0053 as possible.

Targets: $0.0069 and $0.0085.

Stop: $0.005

 

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.