ALGO Forms Big Bear Trap, Aims at $ 2.5

Bulls and bears ALGO have been weighing their brains for three months. A series of fake breakouts towards higher and lower highs has caused price to trade a longer range, warning of some deeper downside moves, but that may no longer be the case.

ALGO forms a big bear trap

The ALGO chart develops one of the rarest and most sought-after bullish reversal patterns in point and figure (P&F) analysis: bullish shakeout. This pattern is only valid during an uptrend and shows near or at the bottom of a corrective move. The sample requirement is two to three Os in the triple bottom model (at least two Os, maximum three Os).

Add to the strength of this model how it affects short sellers. A breakout below the triple bottom is a strong short signal and is viewed by many P&F traders as the minimum entry criteria. However, if the triple bottom does not create a sustained downward move, the short seller will be stuck. And when prices go up, they turn into buyers and increase the pressure to buy.

Algorand ticked all the boxes for a bullish shakeout, and so now is a long chance. A theoretical long entry is above the 3 box reversal area with a buy stop of $ 1,375, a stop loss of $ 1.25, and a profit target of $ 2.50. This trade represents a risk / reward ratio of 9: 1. A stop order with three cells protects any implicit profit entry.

P&F chart reversal $ 0.025 / 3 box

It should be noted that no more than three Os can develop below the three floors. This means that if Algorand rises to $ 1.22 or lower, the long setup will be invalidated.

You can see the ALGO prices here.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page