Components of a Trade Setup

Each trade setup should include a thesis, entry, target(s) and invalidation triggers. This helps provide a framework for capturing potential upside whilst managing risk appropriately.

Note: This is not a signal, call etc. which you should follow, but rather an example of to help you plan and execute your own trade ideas.

Fundamental Thesis:

• POPCAT has emerged as the leading Cat-themed memecoin and is the first to break through the $1bn market cap ceiling, currently sitting at ~$1.2bn.
• Catcoins are potentially undervalued vs. dogcoins for number of reasons outlined including relatively even pet ownership between the 2 animals globally as well as their higher prevalence in internet culture. We take their google trend images and youtube search stats to make this assumption.

Technical Thesis:

• Trend indicator Hull Suite is green on the 1D indicating uptrend is intact.
• Break of multi-month diagonal resistance in September. It’s not uncommon for major resistance to support flip levels (in this case ~$1) to be retested after an impulsive break through before upward trend continuation.

Potential Entry:

• The 0.5 Fib retracement of September’s move ~ $0.97 is confluent with a weekly support level defined by the weekly close high from mid July, making it a clean bull/bear line in the range.
• There is also confluence between the absolute high from July (~ $1.05) and the highs of September’s consolidation range before the impulsive break.
• Accordingly, these two levels represent a logical entry range in which one could layer bids between for an ideal average entry ~$1 mark.

Target:

• There is little evidence of high timeframe resistance before current highs ~$1.5, making them the most obvious immediate upside target.
• It’s also possible to use fib extensions to identify targets for blue sky (no historical resistance levels) breakouts beyond $1.5, but we’ll save that for another time.

Invalidation:

• The lower end of the entry range ~$ 0.97 being a key bull/bear line for September range makes it a clean level for invalidation. I would take a 1D close below as a signal of invalidation, while a second consecutive daily close below would be confirmation to close.
• You could also use an arbitrary percentage for a hard stop to fix your risk on this trade.