Trade Recommendation: MonaCoin

Buying on dips in a confirmed uptrend is one of the best ways to earn profits on the long side. The next best way, though risky, is to try and enter a position when there are signs of a change in trend and accumulation by the strong hands. A change in a trend from down to up is signaled when the bottom pickers buy in huge quantities intermittently. We find a similar setup in MONABTC. Let’s see the levels at which we can initiate the trade.

Key points

  1. MonaCoin has been showing signs of intermittent buying, which denotes accumulation
  2. Higher highs and higher lows point to a likely start of a new uptrend in the cryptocurrency
  3. A risky trade, therefore, please allocate only 50% of your usual position size

Weekly chart

The long-term chart of MONABTC shows that the coin has not gone anywhere in the past three years. There have been short-term spurts, but these have not sustained. As a result, the cryptocurrency has spent most of the past two years near the lows. However, since April of this year, buyers have stepped in at regular intervals, propping the cryptocurrency higher. This shows buying interest returning into MonaCoin.

In early October, the buying pushed the digital currency to a three-year high, which shows strong demand at lower levels. Thereafter, after a brief pullback, MONABTC is ready to resume its uptrend. Hence, we want to hop on.

Daily chart

In early-October, the digital currency was quoting at $0.0001 levels. Sustained buying pushed it to a high of $0.00115 within nine days. That’s a 1050% jump within a matter of 10 days. Thereafter, the subsequent pullback found support at the 78.6% Fibonacci retracement levels of the rally. Since then, the cryptocurrency has been trying to move up. In the past two days, it has taken support at the moving averages and is attempting to resume its uptrend.

Therefore, we recommend a long position at $0.00062 levels with a stop loss of $0.00046. Our target objective is a retest of the highs at $0.0011 levels.

We expect MONABTC to gain momentum once it breaks out and closes above $0.0008 levels.

Note:

If the leader Bitcoin crashes, it is likely to hurt sentiment in the whole cryptocurrency universe. Therefore, please reduce the position size for the next few days, until the picture gets clearer. Please use only 50% of your normal allocation for this trade.

Featured image courtesy of Shutterstock.

Author:
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.