Trade Recommendation: Wings DAO/Bitcoin

We aim to buy cryptocurrencies that are bottoming out. They provide us a good entry opportunity and get us early in a trend. We look for reversal patterns at the lows to initiate our trade. One such setup that we like is the inverse head and shoulders (H&S) pattern. Wings/BTC has completed a break out of the neckline of the inverse H&S, hence, we believe that it is likely to move up. Let’s locate its important levels.

Important points

  1. We believe that Wings DAO/Bitcoin has bottomed out.
  2. The cryptocurrency pair has completed an inverse head and shoulders pattern.
  3. Buy Wings/BTC at 0.00011639, SL 0.00007, Target 0.000164 and 0.00019

Due to a short trading history, we shall not analyze its weekly chart.

Daily chart

Barring the freak trade on the listing day, Wings/BTC rose to a high of 0.00038794 on June 06. From there, the cryptocurrency pair entered into a downtrend, which bottomed out on December 11, at 0.00002851. That’s a fall of 92%.

It broke out of the downtrend line on December 24, which was the first indication that the trend is likely to change.

For the past few weeks, Wings/BTC pair has formed an inverse head and shoulders pattern. Today, it broke out of the neckline, which completes the bullish reversal. The pattern target of the reversal is 0.000164.

However, we believe that the up move can extend to 0.00019 levels, which is a significant resistance. Therefore, we can buy it at the current levels of 0.00011639 and keep a stop loss of 0.00007.

Traders can book 50% profits at the first target objective of 0.000164 and the rest at 0.00019. Always keep a trailing stop loss, once the trade moves in your favor.

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.