Chart Setups & Entries

There goes IBIT, moving into new 52-week highs

William O’Neil’s research found that, during bull markets, stocks making new highs tended to keep moving higher. The strongest opportunities emerged when price broke out of a sound base with strong volume. What looked “too expensive” to many investors could be the beginning of a substantial advance.

Nicolas Darvas built his approach around a similar principle. He watched stocks consolidate within a defined box, then bought as price broke into a higher range. He deliberately sought strength near new highs, allowing the market to demonstrate demand before committing his money.

A new 52-week high puts the entire past year’s trading range beneath the current price. Buyers have absorbed the selling encountered along the way. Why is this important? Because investors trapped at higher prices can create resistance when they finally get an opportunity to sell near breakeven.

That’s what makes IBIT’s move worth paying attention to. The next evidence is whether the breakout holds, and follows through.

IBIT

Buy at $45.90

Stop at $43

Late Stage 1 → potential Stage 2 transition.

It still doesn’t have all the ingredients I normally want for a fully confirmed Stage 2 uptrend, including the 50-day above the 200-day and the 200-day rising, but the change of character is getting my attention.

Not quite Stage 2 yet by Minervini or Weinstein’s stricter definitions.

I Don’t Need to Call the Bottom. I Need to See the Character Change.

Bitcoin and crypto are getting my attention again.

Not because I’m trying to predict the bottom.

Because the price action is starting to behave differently.

Look at IBIT on the attached chart. We had the low, then a higher low, a higher high on strong volume, another higher low, and now price is pushing back toward the prior May high. Short-term relative strength has improved significantly.

That is what I mean by a change of character.

You see this repeated across O’Neil, Minervini, Weinstein, Ryan, and Zanger.

Minervini describes a Stage 2 advance as a stock beginning to stair-step higher through higher highs and higher lows, with strong volume on advances and lighter volume on pullbacks.

Zanger describes an uptrend almost the same way in Momentum Masters: higher highs, higher lows, with tight consolidations between advances. Ryan also wants the moving averages and relative strength confirming the trend.

Weinstein puts heavy emphasis on relative strength improving before the breakout and warns that poor volume on a breakout is a danger signal.

But this is important:

Change of character is not full confirmation.

IBIT has reclaimed its 50-day and 200-day moving averages, but the longer-term trend still has work to do.

Minervini’s confirmed Stage 2 criteria require the 200-day to turn higher, with the shorter moving averages properly aligned above it.

Ryan describes an even stronger uptrend as the 20-day above the 50-day, the 50-day above the 200-day, with the averages rising.

We are not there yet.

There is also still plenty of overhead supply with IBIT well below its all-time highs.

So I’m not saying:

“Bitcoin is definitely starting a new bull market.”

I’m saying:

The evidence is improving.

Higher lows. Higher highs. Improving RS. Big volume on the initial upside move. Low-volume consolidation afterward. Price now pressing back toward resistance.

The next thing I want to see is simple:

A decisive breakout through the prior high on strong volume, followed by price holding that breakout and continuing to build the uptrend.

Then I want to see the moving averages continue to improve and eventually stack correctly as the trend matures.

I don’t need to guess what Bitcoin will do next.

I just need to recognize when the market starts telling me something has changed.