The altcoin world has had something of an unstable week this week. With all the hype surrounding the Chinese asset freeze traders and investors have been quick to buy and sell rumours, serving up plenty of volatility as the week has matured. A look at the LTCUSD and BTCUSD charts will reveal startlingly similar action, with a head and shoulders forming in both, offering up an intraday bearish technical bias. There is one altcoin however that seems not only to have bucked the general altcoin trend, but offers up a contrarian technical bias. That altcoin is namecoin (NMC).
Let’s take a look at the chart. Having traded within a relatively tight range during the latter half of last week and throughout Monday, the pair broke sharply to the upside on Tuesday and withing a matter of hours gained more than 50% in value to reach highs of 3.348. A small correction followed, but support at 2.841 reversed the pair once again to its previous highs. A break below aforementioned support has initiated something of a range, and the pair looks to be forming a symmetrical triangle. In an uptrend, a symmetrical triangle is a continuation pattern, suggesting there may be further upside in the pair, and in turn, a bullish intraday technical bias.
A failed retest of triangle support would offer up an initial upside target of mid range support at 2.841. Beyond that, look for the NMCUSD to reach triangle resistance around 2.970. The pattern would complete if price broke, and closed above, this level. Such a completion would offer up an initial upside target of previous intraday highs at 3.083. Beyond that, look for a break towards weekly highs at 3.348 to signal continuing bullish strength.
In terms of risk management, a stop below triangle support would ensure a timely exit in the event of a pattern invalidation.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com