Our April 6, 2019 trade recommendation for NEO (NEO/USD) hit its first target. On May 16th, the market climbed as high as $13.80. Those who stuck to the trade plan grew their investments by 38% in less than a month and a half.
Now, the second target of $21 is still in play. However, NEO appears to be forming a larger pattern on the daily chart. Larger accumulation patterns often mean larger target prices.
Technical analysis shows that NEO/USD is positioning to take out resistance of $13.50. The breach of that level will trigger the breakout from an ascending triangle pattern on the weekly chart. More importantly, the breakout will signify the end of the market’s 16-month long downtrend. That’s when the fireworks will begin.
We’re confident that NEO will break out of the pattern because the market managed to recover the uptrend line. On top of that, it also printed a bullish higher low of $8.41 on May 10th.
Lastly, the three moving averages (MA) are in perfect bullish alignment. The 50-day MA is above the 100-day MA and the 100-day MA is above the 200-day MA. This indicates that the market’s bullish sentiment is healthy.
The strategy is to buy on dips on the breakout and retest of $13.50. If bulls cement that price level as support, we can see NEO climbing as high as $25.
The process may take more than a month.
Weekly Chart of NEO/US Dollar on Bitfinex
Summary of Strategy
Buy: Breakout and retest of $13.50.
Stop: $12.80 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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