NEO is forming a set up which may provide a good opportunity.
NEO completed the 1st Super wave back in August 2016, reaching a high of just under 0.014. It then underwent a prolonged corrective Super Wave 2 down to just under 0.002. As of mid December it entered Super Wave 3, with the Primary Wave i completing at the end of January. It is now in the Primary Wave ii consolidation. This consolidation has so far peaked at 0.0105 (0.618 fib) and appears to be in a corrective triangle moving down for its final E leg. This final leg would also find support at the 1D 50EMA.
It would be a text book Wave 2 correction if NEO was to complete the E leg and break up out of this corrective triangle. However, it may go down and it is not unusual for a corrective triangle to extend its E wave to 9 in total (up to I).
On the upside, I always get excited when TA data points over lap. Taking the fib from Super Wave 1 provides a target of 0.0225 (1.618) to 0.035 (2.618). Almost the identical figures are achieved by taking the fib from Primary Wave i.
On the downside, if NEO breaks down through this channel, it is likely to find support at 0.007, the 0.382 Fib which would coincide with the the diagonal up .
There's a couple of ways to play this.
(a) Buy after a small bounce on the E leg with a tight stop. The problem with this, apart from risking the stop, is that the triangle could extend to 9 waves tying capital up for no gain for several weeks.
(b) Do (a) but sell if no breakout occurs. This can be difficult to call and one can end up selling just before a reversal that results in a breakout.
(c) Wait for the breakout confirmation. The difference between the top and bottom of this converging end of the triangle is about 20%. It could also end in a false breakout triggering a stop.
My preference is to trade aggressively if the risk return works. In this case, I would be using BTC from my trading pot to enter the trade so I am not overly concerned if the triangle extends. I will want to see a bounce off the bottom of the triangle so I would enter at about 0.0115. The stop loss would be below the lowest point in the triangle at 0.010 (15%). The target would initially be 0.0225 (95%), giving a healthy risk reward of 7:1.
I would then monitor NEO vs LTC and OMG to see if I should swap any of those over to NEO. As always, I'll also be following ETH developments.
Trigger: A BOUNCE OFF THE BOTTOM OF THE TRIANGLE
Probability: High risk early entry
** Wave annotation, largest first
Super : Large black e.g. 1
Primary : Bold grey e.g. iv
Minor : Circles e.g. (4)
Micro : Small light grey e.g.4
1) We break through the bottom of the triangle and retest it
2) We break the top of the triangle