Trade Recommendation: XZCBTC

Usually, breakouts from patterns tend to pull back to their breakout levels. A successful retest of the breakout from a large basing pattern is a good time to buy. It usually indicates the start of a new uptrend and offers the traders an entry with low-risk. We believe that the set up on XZCBTC fits the bill and is worthy of a long position at the current levels.

Key points

  1. ZCoin has broken out of a large range and is likely to start a new uptrend
  2. Buy XZCBTC

Weekly chart

On the long-term chart, ZCoin is trading in a broad range of $0.002 and $0.00759. The attempts by the bears to breakdown of the range failed in October of this year. The cryptocurrency has started to trend up and is likely to rally towards the upper end of the range. If it manages to break out of the large range, it is likely to gain momentum. The current levels offer us an opportunity to buy near the lower end of the range, which reduces our risk. Let’s see the entry and exit levels on the daily chart.

Daily chart

The daily chart shows twin peaks made in mid-April and end-June of this year. However, since July of this year, the stock was stuck inside a range of $0.00162 on the lower end and $0.0036 on the upper end.

An attempt to break out of the range failed on August 10. Thereafter, the cryptocurrency again broke out of the range on November 21 and quickly climbed to $0.005 levels.

As is the case with most breakouts, the digital currency also pulled back towards the breakout levels. For the past four days, the bears have been trying to sink ZCoin back into the range.

However, strong buying by the bulls has pushed the virtual currency back above the range. We expect ZCoin to rally towards its pattern target of $0.0055 and thereafter to $0.007 levels.

However, the cryptocurrency can face resistance at the $0.005 levels, where the traders can book partial profits and raise the stops on the remaining position.

We recommend buying XZCBTC at the current levels of $0.0038 with a stop loss of $0.0030.

Featured image courtesy of Shutterstock. 

Rakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.