Trading Recommendation: Storj/Bitcoin

A range-bound action after a fall is an indication of a base formation. We avoid trading inside such a range until it is large enough to justify a trade. However, a breakout of such a consolidation usually results in the start of an uptrend, which gives us an early entry opportunity. Storj/Bitcoin is setting up for a similar up move. Therefore, we want to buy the breakout of the range.

Important points

  1. Storj/Bitcoin has formed a basing pattern at the lows.
  2. The breakout of the base is likely to start a new uptrend on the cryptocurrency pair.
  3. Buy 0.00013, SL 0.00008, target objective 0.00027.

The cryptocurrency pair has a short trading history; hence, we shall not be analyzing its weekly chart.

Daily chart

Barring the freak high on the opening day, STORJBTC made an intraday high of 0.00070899 on August 12. However, right from the next day onwards, the cryptocurrency pair started its downtrend, which took it to a low of 0.00005002 on December 07, resulting in a loss of about 93% to its investors.

Nevertheless, since early October, the pair has been stuck in a range of 0.00005002 on the lower end and 0.00011356 on the upper end.

Though the bulls managed to break out of the upper end of the range on five different occasions, they could not sustain the higher levels. As a result, the cryptocurrency pair again fell back into the range.

If the next breakout sustains, it is likely to start a new uptrend in the cryptocurrency pair. Therefore, it is worth taking a shot once the pair breaks out above 0.00013. The stop loss for the trade can be kept around the 0.00008 mark. We believe that once above the range, the pair will quickly rally towards the 0.00027 mark.

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.