Polka Dot (DOT/USD) is an alt coin that is considered a competitor of Ethereum. For purposes of a swing trade, the fundamental differences between the two coins are irrelevant. The objective of such short term oriented strategies is to capitalize on momentum.
In the case of Polka Dot, the broader trend is clearly bullish. More recently price has been gyrating within a consolidation which can be interpreted as a trend continuation pattern. After yesterday’s new buy signal (the bullish pin bar), this alt is poised to break out and potentially test the low to mid 40’s over the coming weeks.
These bullish signs appear in the face of a sluggish Bitcoin which is also signals relative strength. This means IF Bitcoin does not retrace that much, or just makes an attempt to go higher, DOT should benefit even further in terms of momentum.
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Here’s the swing trade idea:
Buy Stop: 36.50
Stop Loss: 31.50
Target 1: 41.50
Target 2: 46.50
Target 3: 51.50
Please note: IF price is between 36.50 and 36.75 by the time you read this, it is still within reason to buy since the reward/risk is acceptable. If price is pushing the 36.90s or is in the 37’s, then it would NOT be a good idea to buy it since the reward/risk will be much less favorable.
Also this trade idea is based on the prices from Bitfinex. Other exchanges may not show the same exact prices at the same time. Make sure to adjust to the differences if using an exchange other than Bitfinex.
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