The entire market as a whole has rallied with Wabi being up over 100% from where we bought. We stuck to our plan and strategy and trimmed off some risk at 1.32. But the market is signaling it wants to move higher, so do we add back our position or do we wait to see if we get an opportunity at lower levels after a rebound from 1.10? To determine this we look at a couple of likely scenarios.
Chart and Scenarios:
Scenario #1: The market pulls back here and we get an opportunity to buy at 1.20 or lower. The main support area of 0.82 to 0.97 contains the 0.618 retrace of the overall bullish swing. Initial support at 1.14 has two overlapping levels and even a shallow retrace support is found at 1.26. Pays to wait
Scenario #2: Wabi continues higher to 1.69 and then pulls back. Major support is found at 1.25 to 0.98 with shallow support at the 1.26 level. Pays to wait
Scenario #3: Wabi rallies up to the top of extreme resistance level hitting 1.90. Major support is found around 1.07 to 1.29 with minor support found at 1.37. Pays to wait
Scenario #4 Wabi just continues to rally. I’m still invested.
So even if Wabi rallies to the extreme resistance level it is likely we get an opportunity to buy lower than the current level of 1.384 or slightly higher at 1.41. Since strong rallies are generally followed by strong corrections, there is also the potential that if it does extend to this extreme level we can still pick up lower than the current level.
Sure Wabi can just continue to rally higher and we never get an opportunity to get it under 1.40 again. From a risk / reward standpoint this is a risk I am willing to take. More often then not, buying at resistance areas leads to temporary comfort followed by a “Pepto bismol” moment. This brings us to Scenario #5. We buy Wabi here and it pulls back to 0.82 and we could have bought nearly twice as many coins for the same amount of money.
The Purple arrows are showing a shallow correction, not a major 0.618 or eve 0.50.
The chart is no doubt bullish, but as we seen only a month ago, sentiment can change on a dime. How quick many have forgotten that everyone was screaming 3k only a month ago.
Boring is good right now as the market looks for direction. This is a higher risk area to trade and the reason we have not posted any recently, though we have seen and even written about several setups. It is not about the quantity of trades you make, but the quality. Quality trades require patience and that is simply what we are doing here. We are being patient and letting the market provide direction prior to just buying the FOMO. After all we likely see near these levels again regardless of how the market moves.