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Trade Recommendation – OmiseGo

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MiseA cryptocurrency that doesn’t give up much ground after a strong up move is a sign that traders expect more gains after a period of brief correction/consolidation. Currently, while bitcoin hogs all the limelight, we are on the lookout to find altcoins that have held up well. One such digital currency that pops up on the radar is OmiseGo. We believe that it is setting up for a long trade. Let’s see why.

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Key observations

  1. OMG has been comparatively strong compared to many other altcoins
  2. OmiseGo has formed a bullish inverse head and shoulders pattern
  3. We expect the digital currency to rally once it breaks out of $8.71

Daily chart

From a low of $0.3150 on July 16, OmiseGo rallied sharply to hit a high of $13.6860 on September 07. That is a staggering rally of 4244% within two months. Thereafter, the digital currency entered a period of correction, which found support at the 61.8% Fibonacci retracement levels of the entire rally. This shows that the traders are waiting to buy the dips, which is a bullish sign.

For most of the past two and half months, OMG has stayed above $7 levels, which is the 50% Fibonacci retracement level.

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OMG broke out of the downtrend line on October 8. Though a break above the downtrend line doesn’t confirm a new uptrend, it indicates that the decline has stalled. The digital currency again retested the downtrend line on October 12 and held it. This shows that the correction in OMG is over. However, when should we buy it?

The virtual currency has formed a bullish inverse head and shoulders (H&S) pattern, which will complete on a breakout and close above the neckline of $8.71. OMG has returned from the $8.71 levels on four occasions, which makes it a significant resistance. We expect the cryptocurrency to gain momentum once it breaks out of the overhead resistance.

Therefore, we recommend a long position on a breakout and close above the $8.71 levels. The pattern target on a breakout of the inverse H&S is $11.9358. We shall keep a stop loss of $7. We don’t want to hang on to the trade if the breakout fails.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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4 Comments

4 Comments

  1. deegoldie

    November 22, 2017 at 7:38 pm

    This is great! Any tips you can share on the criteria you are using to screen for these opportunities?

    • Rakesh Upadhyay

      November 23, 2017 at 5:21 am

      Hello deegoldie,

      Thank you.

      I am old school, I eyeball the charts to find these. I look for cryptocurrencies that are outperforming. Then, I select the ones that form bullish patterns. This is it, nothing complicated.

      With warm regards
      Rakesh Upadhyay

  2. douglash

    November 23, 2017 at 2:28 am

    The question I always have on breakout altcoins is not whether they seem likely to gain against USD, but whether they’ll outpace BTC. I’ve had some trades that look terrific in dollar terms, but leave me behind in BTC terms. And that’s my real performance benchmark for crypto. I would really appreciate this kind of analtsis in these coin pick articles. So how does OMG look against BTC?

    • Rakesh Upadhyay

      November 23, 2017 at 5:26 am

      Hello douglash,

      Your view point is also correct.

      However, as a trader, my aim is to make money by limiting my risk. At times, these trades might be in dollar terms and other times it may be in BTC terms. The bottom line why we all trade is to make money.

      Nonetheless, soon I will post an analysis on the cryptocurrency that looks good in BTC terms.

      With warm regards
      Rakesh Upadhyay

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Altcoins

Trading recommendation: Lisk/Bitcoin

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The best way to trade a range-bound market is to buy at the lower end of the range and sell at the upper end. If the range is large and well established, it offers us a good risk to reward objective. We believe that LSK/BTC fits the bill and offers us an attractive opportunity to buy at the support and sell at the resistance.

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Key points

  1. LSK/BTC has formed a large trading range.
  2. Buy at the lower end of the range.
  3. Sell at the upper end of the range.

Weekly chart

LSK/BTC has been trading in a large range of $0.00046 on the lower end and $0.0016 on the upper end. On three occasions, the cryptocurrency pair has bounced off the supports. Similarly, it has returned from the $0.0016 levels thrice. The range is well defined. Currently, price is trying to rebound after breaking below the lower end of the range last week. We believe that a buy at current levels offers us a low-risk and high-reward trading opportunity.

Daily chart

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On December 07, the cryptocurrency pair broke below the support of $0.00046. However, the very next day, it climbed back into the range, which is a positive indication. This shows that the bulls want to keep the range intact. However, the rally from the lows hit a roadblock at the 20-day EMA.

Currently, LSK/BTC is again pulling back towards the lower end of the range. If the support holds, we believe that the digital currency will again rally to the upper end of the range. Therefore, we suggest buying 50% of the desired allocation close to $0.00050 levels. Remaining 50% of the position should be purchased once the digital currency breaks out of $0.00068. The profit objective is a rally to the upper end of the range at $0.0016. The trade should be closed if the virtual currency breaks down and sustains below the lower end of the range. This is a long-term trade.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Altcoins

Trade Recommendation: XMR/BTC Pair Throwback

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The XMR/BTC market (Monero) has been in downtrend on the hourly chart after posting a high of 0.0225 on December 6 and failing to hold critical support at 0.02. It went to as low as 0.0145 on December 8 before respecting RSI at 32 where it established support. The market used the new support level to rally and generate one higher low after the other. It recently attempted to reclaim support at 0.02 but was repelled by bears. Currently, the market is trading around 0.019 levels where it appears to have created another higher low.

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Technical analysis shows a large reversal pattern in the hourly chart that can take the XMR/BTC pair to 0.025. Even though the market failed to breach resistance at 0.02, investors should not see it as a failed breakout. What we’re seeing is a throwback which is a temporary retreat in price. Throwbacks are common in breakout plays and are often seen as a bullish signal. The next time the market attempts to breach 0.02 resistance, it has a much better chance of breaking it with conviction.

The strategy is to buy breakout at 0.02 with immediate stop at 0.0189.

Hourly XMR/BTC Chart on Poloniex

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As of this writing, XMR/BTC is trading at 0.018714 on Poloniex.

Summary of Strategy

Buy: breakout at 0.02

Target: 0.025

Stop: move below 0.0189 after buying breakout at 0.02.

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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Altcoins

Trade Recommendation: FCT/BTC Bullish Reversal

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The market reach its all-time high back in June this year when FTC/BTC (Factom) reached 0.01463162. Unfortunately, the pair wasn’t able to sustain its momentum. It created a lower high several days later at 0.01066744 which signalled investors to take profits or cut their losses. As a result, the market tumbled and lost 93.17% in value from its all-time high. Such a tremendous loss would have created an atmosphere of despair in the market. Usually, that’s when the savviest traders come in.

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Technical analysis reveals that the worst is behind the pair. FCT/BTC touched support at 0.001 on the daily chart twice and respected it on both occasions. This is a good indication that the market has found a reliable support level. In addition, hourly chart shows that a large reversal pattern is underway. The pair may have retreated when it nearly touched 0.002, but it generated a new higher low in the process at 0.00156566. The throwback is a bullish signal that enables the pair to gather momentum to break resistance at 0.002.

The strategy is buy on breakout at 0.002. Breach that level and the market reclaims 0.003. Sell that level because it is a strong resistance.

Hourly FCT/BTC Chart on Poloniex

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As of this writing, FCT/BTC is trading at 0.001738 on Poloniex.

Summary of Strategy

Buy: breakout at 0.002

Target: 0.003

Stop: move below 0.0018 after buying breakout at 0.002.  

 

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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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