The NEO/Ethereum (NEO/ETH) pair took out resistance of 0.07 on August 31, 2018. This triggered the breakout from the large falling wedge on the daily chart. The price action attracted breakout players and momentum traders who helped push the pair to as high as 0.099934 on September 12.
Although we missed the breakout rally, we’re confident that we’ll be able to buy the dip. After all, NEO/ETH was already trading at extreme overbought territory. It would be foolish to chase a flying altcoin. We’d rather wait for the pullback and see how the market plans to resume its uptrend. It looks like we’re getting the go signal.
Technical analysis shows that NEO/ETH has just taken out resistance of 0.08. This enabled the pair to break out of the bullish pennant on the daily chart. The breakout looks convincing because of serious volume. On October 18, the market breached the resistance with volume that’s over 180% of its average.
In addition, the 30-day, 60-day, and 90-day moving averages are all lining up below the candles. This is an uncommon alignment indicating that the uptrend is strong and healthy.
The strategy is to buy the retest of breakout as close to 0.08 as possible. As long as the market stays above this level, it has all the momentum it needs to rally to our target of 0.115. The process may take a month.
Daily Chart of NEO/Ethereum on Binance
As of this writing, the NEO/ETH pair is trading at 0.081214 on Binance.
Summary of Strategy
Buy: As close to 0.08 as possible.
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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