Our April 3, 2018 recommendation on the NEM/US Dollar pair (XEM/USD) hit its mark on April 20 when the market closed above $0.40. Those who bought at the time of the recommendation have grown their investments by over 90% in less than three weeks.
While we expected the pair to range trade, its ability to hover around $0.40 resistance is an indication of strength. It appears that a significant number of XEM/USD holders bought below $0.40. Those who bought above the resistance have most likely cut their losses already. This tells us that the market would not find it extra difficult to breach $0.50, which is a firm resistance and the 23.6% Fibonacci level. Take that out and the market is likely to ignite another bull run.
Technical analysis show that NEM/Bitcoin is in the midst of reversing its trend after completing a five wave down. An ABC pattern appears to be in the works as a rounding bottom reversal pattern. A break above $0.50 would attract momentum traders who can push the pair to our target.
The strategy is to buy the breakout at $0.50 as long as the market prints 1 million units of NEM volume. Those who bought bottom are likely to take profits at the firm resistance level. The pair needs buyers who can absorb the expected selling pressure. A successful breakout would lift XEM/USD to $0.742, which is also the 38.2% Fibonacci level.
The process can take less than a month.
Daily Chart of NEM/USD on HITBTC
As of this writing, the NEM/US Dollar pair is trading at $0.37229 on HITBTC.
Summary of Strategy
Buy: Breakout at $0.50 after the market prints 1 million units of NEM volume.
Stop: $0.472 after the breakout.
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.
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