Don't Ignore This Chart!

This Thing Has 70% Upside Potential...

Julius de Kempenaer

Julius de Kempenaer

Senior Technical Analyst, StockCharts.com

I got triggered to watch the chart printed above when I was scrolling through the pre-defined RRG groups.

This is a routine I go through on a regular basis; just flip through all pre-defined RRGs and see if I note any strange or particularly strong or weak rotations. Literally right as I loaded the last RRG in the drop down box, I saw the RRG below.

This is a universe of cryptocurrencies while using Bitcoin ($BTCUSD) as the base for the universe. The tail for $ADAUSD immediately caught my attention as it is powering into the leading quadrant, far away from the other cryptos in this universe. As I am by no means a crypto expert I looked up what kind of coin ADA represents. It is called Cardano.

But from a technical (trading) perspective, that is "nice-to-know" information. What I really liked when I opened up the weekly chart for $ADAUSD was the breakout that seems to be unfolding right at this moment from a two-year base. As you know, such long-term breakouts are rare, but when they do occur they usually lead to significant price moves.

Like so many of these cryptocurrencies, Cardana jumped to a high of $1.40 shortly after the introduction, then faded away to levels around $0.11-0.13, followed by a hiccup to $0.39 in April 2018 and then breaking below $0.11 in August.

Once below $0.11, $ADAUSD started trading in a range between roughly $0.03 and $ 0.11 for about two years... until a week ago when it cleared the upper boundary of that range.

I know, the range of the movements in these Crypto Coins is unbelievable; the distance from low to high INside that range was around 350%. The move from the High at $1.40 to the Low, say, $0.03 is 98%. So trading this is not for the faint of heart, but it can be a nice play on the side.

If I just apply some basic TA to the chart of $ADAUSD, I would project the height of the range ,which is $0.07-0.08, to the breakout level, let's say $0.11. That gives a price target around $0.18-0.19, which is roughly 70% upside...

And looking at the chart I can also make a case for the next major resistance level to come in around $ 0.39.

And you know what...? Such moves are totally possible in Crypto Space.

#StaySafe, --Julius


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Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
CreatorRelative Rotation Graphs
FounderRRG Research
Host ofSector Spotlight

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Feedback, comments or questions are welcome at Juliusdk@stockcharts.com. I cannot promise to respond to each and every message, but I will certainly read them and, where reasonably possible, use the feedback and comments or answer questions.

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Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on StockCharts.com in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More