Dogecoin (CRYPTO: DOGE) spiked up over 7% higher at one point Wednesday as it continued its trek north in a strong uptrend pattern on the daily chart. An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods. Traders can use moving averages to help identify an uptrend, with rising lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often occur at resistance and support levels.
In an uptrend, the "trend is your friend" until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
- Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on the higher low.
- Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low, indicating a reversal into a downtrend may be in the cards.
See Also: Dogecoin Up More Than 3% In 24 hours
The Dogecoin Chart: On March 15, Dogecoin hit a bottom at the 11-cent level and reversed course into an uptrend that was confirmed on March 21, when the crypto printed a higher low at the $0.117-mark, which Benzinga predicted the day prior.
- The lower high also formed Dogecoin into a bull flag pattern, and on March 22, the crypto broke up from the flag formation. Dogecoin continued to fly higher Wednesday on momentum.
- On Wednesday, Dogecoin had higher-than-average volume, which indicates a high amount of interest has returned to the crypto. By midafternoon, Dogecoin’s volume was measuring in at over 357 million compared to the 10-day average of 223.35 million.
- If Dogecoin ends the 24-hour period below the 13-cent level, it will print a shooting start candlestick, which could indicate the next higher low is in the cards. If the crypto trades near its high-of-day price, it will print a bullish Marubozu candlestick, which could indicate higher prices will come again on Thursday.
- Dogecoin has resistance above at $$0.135 and $0.146 and support below at 12 cents and the just above the 10-cent level.
