CAKE → Bounce to the Moon! Take Advantage of This Opportunity!
PancakeSwap is bullish in more ways than one! The price is playing out a beautiful two-legged pullback after a strong bull run; an indicator that the bulls are in control and more upside is probable.
How do we trade this?
With a two-legged pullback after a bull run and the RSI above the Moving Average with room to spare on the upside, we have to remain bullish. We're missing one critical piece of the puzzle to enter a long trade; the bull signal and confirmation bars. The bull signal bar will have a long tail and a close on or near its high, followed by a strong bull candle closing on or near its high. The confirmation candle should close above the resistance line and re-test it as support. That would be the ideal long setup as depicted in my analysis.
This is a conservative long, taking profits just prior to the double top high. You could close half of your position and take profits at a 1:1 Risk/Reward and swing the remainder to a 1:3 Risk/Reward or until you see a sell signal. Trade depending on your strategy!
Be aware, we could also fail to break resistance and end up with a strong bear signal, completely changing our trading bias. Always be ready to change your bias and learn to recognize those signals.
Long Entry: $2.26
Stop Loss: $2.02
Take Profit: $2.74
Risk/Reward Ratio: 1:2
1. Bull Trend Consolidating, Bias to Long.
2. Double Top followed by Two-Legged Pullback, Bullish.
3. Watch for Support at 200EMA.
4. Do not Long until Bull Signal Bar and confirmation Above Resistance.
5. RSI at 53.00, above Moving Average. Supports Long.
You are solely responsible for your trades, trade at your own risk!
Find me at TradingView.com/u/TraderEngineering/
If you found this analysis helpful let us know what you think in the comment section below!