OMG/ETH Bull Flag Swing Trade
Updated
After further analysis of the Bull Flag chart that I posted yesterday, I have decided to place a buy order at 0.0205 for a swing trade on OMG/ETH. I believe that there is pent up demand and interest around this project that will lead to a parabolic increase in price once more information is announced regarding staking, partnerships that are currently under NDAs and plans for on/off ramps for fiat-crypto. Based on OMG's roadmap as well as updates that I've been following on Plasma and their SDK, my three-month upside target for this position is 0.08 OMG/ETH and I believe that fluctuating ETH/USD prices will have NO effect on its trajectory. I plan to take profit at 3 key support/resistance pivot points of 0.025, 0.0325 and 0.0385. I will set a tight stop-loss at 0.01985.
On a side note, I don't intend to exit any of my other positions or add fiat to make this trade. Instead, I've decided to collateralize a good portion of ETH into MakerDAO's smart contract CDP system, draw DAI and use it to buy the ETH that I'll use to purchase the OMG. I can't get over how cool it is that I can collateralize my crypto assets on the blockchain and extract value to use for growing my portfolio. Once BTC makes a bullish reversal and the entire market heads back towards ATHs, I plan on collateralizing more ETH and swing trading on margin.
2018 should be full of surprises in this ecosystem, and I fully intend to make money on these emerging technologies.
**full disclosure--I'm long OMG and have maintained a position since Fall 2017. This trade is set up for short-term profit, and I don't intend to touch my long-term OMG holdings for at least 2-3 years.
- Peace -
On a side note, I don't intend to exit any of my other positions or add fiat to make this trade. Instead, I've decided to collateralize a good portion of ETH into MakerDAO's smart contract CDP system, draw DAI and use it to buy the ETH that I'll use to purchase the OMG. I can't get over how cool it is that I can collateralize my crypto assets on the blockchain and extract value to use for growing my portfolio. Once BTC makes a bullish reversal and the entire market heads back towards ATHs, I plan on collateralizing more ETH and swing trading on margin.
2018 should be full of surprises in this ecosystem, and I fully intend to make money on these emerging technologies.
**full disclosure--I'm long OMG and have maintained a position since Fall 2017. This trade is set up for short-term profit, and I don't intend to touch my long-term OMG holdings for at least 2-3 years.
- Peace -
Note
Comparing several of the last OMG/ETH run ups to what I believe we will see if this bull flag sends the price flying after the last few days of consolidation on the 4H chart.. OMG is primed and ready for lift off, all we need now is a little good news. The increase in price should be sharp and will likely resemble the run up in blue that we saw Dec 15 - Dec 18 (~62% in 3 days).
Just for fun: a 5 ETH position taken at 0.0205 will net around 243 OMG tokens. Assuming you were to liquidate 33% of the 243 tokens at each of the key resistance zones that I've noted you will yield:
81 OMG x 0.025 OMG/ETH = 2.025 ETH
81 OMG x 0.0325 OMG/ETH = 2.6325 ETH
81 OMG x 0.0385 OMG/ETH = 3.1185 ETH
potential profit = 7.776 - 5 = 2.776 ETH or 55.5%
Trade active
The 4H chart shows the breakout that we were looking for was executed perfectly. The blog post that sparked this breakout was controversial on reddit and telegram (being April 1st), but after reading through the news several times, I'm still very bullish on the coming weeks with OMG. There will be a hard spoon (?) that gives all OMG token holders a 1:1 airdrop for another OMG token on the Cosmos PoS network. I believe that the price will continue to rise to our pivot points this week and could see another bull flag breakout after the second Town Hall meeting on April 4.
I have increased my stop loss to 0.0225 to protect some profit, and I will be watching this pair closely this week.
Trade closed: stop reached
My stop-limit was reached during the consolidation, so I closed the position at 0.0225. Here on the 1H chart, I'm seeing the top of the bull flag acting as some support now so I'm looking to see buy volume increase enough to drive the OMG/ETH price steeply back towards 0.025. I have a new buy order placed just above the top of the flag (upper yellow line) at 0.0224. A failure of the top of the flag as support wouldn't be good, and I'd anticipate a sharp decline to the bottom of the flag at 0.020. We need to be patient here...
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