NEO (NEO/USD) looks like a market that wants to break out of accumulation. The market started the accumulation process on December 7, 2018 when it established support of $5.50. This crypto traded around that level for a couple of weeks until a surge in volume showed participants that the market was ready to move higher. The volume uptick ignited a rally that sent the market to as high as $9.36 on December 24, 2018.
If the market was still bearish, NEO would have dumped back down to $5.50 support or even went below it. However, the market generated a higher low set up of $6.92 on December 28, 2018. That was enough for many to start placing long positions in the market.
Technical analysis shows that NEO/USD breached resistance of $9 on January 8, 2019. This triggered the break out from an inverse head and shoulders pattern on the shorter time frames. As a result, the market rallied to as high as $10.08 on January 9.
While NEO is currently pulling back, the rally gave the market its first higher high in months. If NEO can stay above support of $7.30, the market’s sentiment will turn from neutral to slightly bullish.
The strategy is to buy on dips as close to $7.30 support as possible. The 100 moving average on the 12-hour chart as well as the 200 moving average on the 4-hour chart are crawling around that price area. They will help keep the price above the support.
Should the price manage to stay above $7.30, the market will likely generate the momentum to rally to our target of $9.00. Take that out and the next target is $13.50.
The process may take a less than month.
12-hour Chart of NEO/US Dollar on Binance
As of this writing, the NEO/US Dollar pair is trading at $7.86 on Bitfinex.
Summary of Strategy
Buy: As close to $7.30 as possible.
Targets: $9.00 and $13.50.
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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