With Bitcoin continuously flirting with recent highs, many of the alt coins appear to be on the verge of a broader correction. Just as the sentiment change in the alt space eventually surfaced as a dramatic short squeeze in Bitcoin, the current profit taking can also hint toward a retrace in Bitcoin as well. This is all well and good since a pull back in this space can provide a much more attractive buying opportunity. We are closely watching a variety of alt coins and this report will focus on the technical position of WABI.
Wabi: Bigger Picture Points To 62 Cents.
WaBi which operates under the brand Tael utilizes blockchain to combat counterfeit products. Just think of all the fake Gucci bags out there. They have a working product that aims to solve that problem. Those you know me, know that I really don’t care about fundamentals that much. That is Andrew’s job. The chart is what tells me if investors favor this coin or not. And it tells this story through its overall price structure.
Where Is The Wave 4 Bottom?
After bottoming out in December (with the rest of the market) the price structure has produced 3 clear impulse Waves and is currently constructing a potential Wave 4. This is compelling because Wave 4 tends to be the most predictable wave in the series. Why? 3 previous waves must be in place. A Wave 4 corrective structure implies that one more leg higher (Wave 5) is likely to follow.
Currently, price is finding support around the .30 level which also happens to be the .382 of the entire bullish structure since the December low.
Wave 4’s are tricky though. Just because it finds one support does not guarantee it is the best place to buy. Just below .30, there is a historical support of .24 (old resistance/new support). Along with that, it is important to consider the context of the entire space, not just this one coin is isolation. By now you should realize that every alt coin follows the price of Bitcoin more or less and Bitcoin is poised to retrace.
This is what we are waiting for. If Bitcoin pulls back and WaBi manages to hold somewhere between .30 and .24, that area may provide an attractive place to establish a position or add more to your inventory.
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Where can it go? It is also very important to consider realistic targets. Based on the next resistance area, the peak of Wave 5 can reach the .62 level. This would be an area to lock in SOME profit at least, ESPECIALLY if you own it from sub .30 levels.
Remember there are NO safe investments in this space. Many of these super cheap coins are highly speculative and no chart can tell you how their business model or solution will fair. So you lock in profits on some of your position when you can, and hold onto some to see how much more it can run. Locking in profits at predetermined levels is a MUST in my opinion because it not only reduces risk, but frees up more capital to put to work IF more opportunities present themselves. Staying all in and hoping for home runs is a gambler’s game. No different than playing the lottery.
The best thing you can do is extract your initial investment and then own coins for free. If they run, it’s all profit, it they go to 0, you only gave back “house” money. Andrew employs this particular strategy on our long term portfolios.
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