Hi friends hope you are well and welcome to the new update on Polymath token. The POLY token has surged more than 180% and we had to very obvious signals before this bullish rally. Let’s have a look on these signals and complete analysis.
1st signal Launch of Polymesh Testnet v1:
On 14th of May 2020 the Polymath team announced on twitter that test net version 4 is going to be launched on 23 of June Polymesh Testnet v1 will be launched on 23rd Jun 2020.
https://twitter.com/PolymathNetwork/status/1260967273285799937
- PolymathNetwork
This announcement was a very big invitation to many traders and buyers. And they started buying polymath after this tweet. If we watch to the coinmarketcap.com then it can be seen that on 14th of May the market cap of POLY token was 12.4 million dollars and now it is increased by 28.4 million dollars. It's mean that the market cap of Polymath has been increased more than 133%.
https://coinmarketcap.com/currencies/polymath-network/historical-data/?start=20200514&end=20200622
2nd signal a bullish Gartley move:
Second signal was very obvious Gartley move by the price action of Polymath. The formation of this statement was started from 25th January 2020 on 4 day chart. And the pattern was completed on the 2nd April 2020. Since then the price action was moving in the potential reversal zone of this pattern that starts from 0.618 and ends up 0.786 Fibonacci retracement level. And finally in the month of May 2020 the price action took a powerful bullish divergence and produced more than 180% bullish rally so far.
Up channel formation:
After bullish move the priceline of POLY token started moving within an up channel. So far the price action is moving within this up channel and during this move it is hitting the support and resistance levels very well. At this time the priceline is at the support. I have also placed simple moving averages with the time period of 25 50 100 and 200 on this chart. And we can see that the smallest time period moving average is above all other simple moving averages and biggest time period moving average is below all the other moving averages. Therefore a complete open alligator mouth by the simple moving averages has been formed and that is very strong bullish signal. While the priceline is retesting the support of the channel it is also having the support of 25 simple moving averages as well.
Exponential moving averages are playing a good support role:
On the daily chart the price action crossed up the exponential moving averages with the time period of 10 in 21 on 15th may 2020. Since then the priceline is moving above the both exponential moving averages. If we take a closer look on the movement of price action above these EMAs then it can be easily observed that whenever the price action moves little bit down it uses these EMAs as support and moves up to start another bullish rally. At this time the price action is a gain retesting these exponential moving averages as support.
Should we buy here? And if someone bought it then where to exit?
Now if someone wants to buy the POLY token after when the price action has already been surged more than 180% then he or she can buy it at the support of the channel and make this support the stop loss. Because the support of this channel is very much strong and it is very obvious since the price action has started the bullish rally it has never broken down this support of channel.
Bill William alligator indicator and stop-loss technique:
Here I would like to suggest another technique that I use to catch such bullish rallies. And that is the use of Bill William 3 lines that is also called the Bill William alligator indicator. This indicator is very useful to catch the bullish and bearish is rallies. This indicator is a combination of three moving averages. The smallest one is with the time period of 5 the other one is with the time period of 8 and the biggest time period moving average is 13. The smallest one called lips the middle one is called teeth and the biggest one is called jaw. Whenever the smallest time period moving average moves above all other moving averages and the biggest time period moving average moves below all other moving averages then it is called that the alligator mouth is opened. And this is a strong buying signal. And whenever the smallest time period moving average moves below all the moving averages and the biggest time period moving average moves above all MAs then it is called that the alligator mouth is closed and that is a strong is sell signal.
Even though this is very useful indicator but however the time period of these moving averages is very small. Therefor sometimes this indicator can give the false signals. In order to avoid the false signals by this indicator we should use some other combination of indicators as well. For example here I am using the simple moving averages with the time period of 25 50 100 and 200. Now for example if the alligator mouth will be closed then we can find that which one of other simple moving averages from 25 50 100 and 200 we have as recent support below the price action. Now for example if we have the 25 simple moving average then we should wait for the 25 SMA to be broken down. If this simple moving average will be broken down then we can take exit as stop loss. This method can save you from the false signals of alligator indicator and you will also not miss the next bullish rally.
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Conclusion:
The up channel that has been formed on the 12 hour chart has very much significance for this bullish rally. If this up channel will be broken down that will be the first strongest signal that now the price action can start a correction rally or a bearish move. However we should use some other combination of indicators like I have suggested to avoid any kind of false signals. If you have any strategy then you can also use that to avoid any unnecessary sell by getting trapped in a bear trap.
Note: This idea is education purpose only and not intended to be investment advice, please seek a duly licensed professional and do you own research before any investment.