- VeChain price huddles around the 61.8% Fibonacci extension of the April decline.
- Conviction in the historic 7-week gain leads to three consecutive inside weeks.
- Cup-with-handle base measured move is 1,520%.
Vechain price is in preparation for an 80% gain from the current price as VET pursues the measured move target of a multi-year cup-with-handle base at $0.377.
VeChain price requires time and speculators need patience
History repeats itself, and it is valuable to learn to use historical precedents in investing or trading. One of the precedent patterns, made famous by William J. O’Neil, is the cup-with-handle pattern. It can develop as a primary base, as in the case of VET, but more frequently as a continuation pattern following a definite price uptrend.
In most cases, the bottom part of the cup is rounded, allowing the stock time to complete a necessary correction, with a couple of shakeouts along the lows of the cup. The cup area is critical because it liquidates the weak holders and shifts the attention of speculators away from the financial instrument. With weak holders gone, there is a solid foundation to build the right side of the base, and finally, the handle.
For 18 months, from July 2018 to January 2021, VeChain price sketched out a cup-with-handle base that yielded a tremendous gain of 1,100% from the breakout of the handle at the beginning of January. The rally included the historic 7-week gain of 539% from the beginning of March until April 17. And, the advance culminated with the largest weekly gain since VET began trading, at 82%.
A gain of 1,100% merits some time to consolidate and release the accumulated price compression. VeChain price has spent the last three weeks consolidating the historic gain of 2021 with three consecutive inside weeks, just above the long-standing ascending channel that began in December 2020.
Since April 26, the consolidation has been occurring along the 61.8% Fibonacci retracement of the April decline at $0.209 and above the ascending channel. The initial objective is to release from the tightening consolidation with a volume thrust, followed by a probe of the all-time high at $0.282. A successful breakout for VeChain price will test resistance at the 361.8% extension of the August-November correction in 2020 at $0.309, representing a 50% gain from the price at the time of writing.
The aggressive objective for Vechain price is to overtake the cup-with-handle measured move target at $0.377, presenting a 86% gain from the price at the time of writing.
VET/USD weekly chart
For the bullish thesis to be invalidated, VeChain price will need to close below the April low of $0.128. Before that can happen, VET will have to wrestle with solid support framed by the 10-week simple moving average (SMA) at $0.138 and the channel mid-line at $0.129.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.