OmiseGo is at a long-term support level. For a long time, the OmiseGo has witnessed a bear trend. Now that price has found strong support, one can make a case for a retracement above. This gives a great risk-reward opportunity for traders.
There is clear bullish divergence observed in relation to Chaikin Money Flow. As you can see in the chart, with the decline in price, there has also been an inverse increase in Chaikin Money Flow index, suggesting bullish divergence on the 1 D chart.
Similarly, one can observe bullish divergence on the RSI on the daily chart. RSI bullish divergence is a strong indicator suggesting an impending short-term reversal.
If we have a look at the Fibonacci retracement, the long-term trend can comfortably retrace up to 0.0007 BTC price area (0.236 ratios) and can still remain bearish. While such a scenario would not hold well with long-term OMG investors, it will be still great for swing traders, giving a very decent return.
Traders will be looking for various short-term targets. A break above the closest resistance at 0.00042 BTC (Target 1) can push the price all the up to 0.00075 BTC with various targets in between where traders can take profits off the table. Targets include Target 1 at 0.00042, Target 2 at 0.00053, Target 3 at 0.00065 and Target 4 at 0.00075.
Verdict: Cautiously Bullish
Comment: In terms of risk management, stop loss must be put at 0.00032 BTC.
By Vishal Chawla
Disclaimer by the Author:
This is not an investment advice or promotion to ICO or Cryptocurrencies or any other investment in any form. These views are based on Author’s own research and readers must execute caution & suggested to do their own research during any investments.