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Kusama (KSM/USD) was down over 3% on Tuesday even though most of the other currencies were trading in green. KSM was up over 13% last week and this week could be the pullback before it sets a new all-time high. Should you buy the dip in the KSM?
A look at this year’s charts-
- After testing the resistance at $385 multiple times KSM gave a strong breakout on Sunday and is now retesting the $385 level on Tuesday.
- If KSM can sustain above $385 a new all-time high should be hit in the coming weeks as the retest will eliminate any false breakout fears.
- Before taking a long entry it is important that investors wait for a clear reversal, as an early entry could cause investors to get trapped in a false breakout.
- A reversal is expected around $386, investors can take a long entry once KSM reverses and resumes its rally.
- If a successful retest is seen a new all-time high should be hit in the coming weeks and investors can also hold small quantities for higher targets.
- In case a breakdown is witnessed, a stop-loss can be maintained at $360.
Is it time to enter KSM on Tuesday?
- A bullish divergence was formed on Tuesday, this is indicating towards a reversal, however, KSM could still fall to the level of the demand zone at $386 thus investors can start entering in small parts.
- KSM also has a demand zone at $390, it could also reverse from that point.
Conclusion
KSM is making a perfect structure- a breakout with a retest which could yield investors some great returns. Nevertheless, investors must wait for the right time to enter and should not enter without a clear reversal as they could get caught in a false breakout. Investors can expect a new all-time high once a clear retest is seen.