Why The Dogecoin, Litecoin Downturn Could Slam This Penny Stock Crypto Miner
Hello Pal International, Inc (OTC: HLLPF) fell over 7% lower on Thursday in sympathy with Dogecoin (CRYPTO: DOGE) and Litecoin (CRYPTO: LTC).
The travel-based social media app, which offers a cryptocurrency wallet and plans to offer Dogecoin and Litecoin mining services to customers from its “in-house” rigs, has spent the last eight trading days consolidating sideways after declining over 40% from its Nov. 16 high of 70 cents.
The sell-off, although it bring the stock near to oversold territory, may not be over if Hello Pal completes the bearish pattern it may be setting up on the daily chart.
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The Hello Pal Chart: Within the sideways consolidation, Hello Pal is trading in a slight downtrend, with the most recent higher high printed at the 47-cent level on Dec. 8 and the most recent higher low created on Dec. 6 at the 39-cent level.
The stock may also be setting up the right shoulder of a bearish head-and-shoulder pattern, with the left shoulder forming between Oct. 1 and Nov. 1 and the head between Nov. 2 and Dec. 6.
If the stock price rises up to complete the second shoulder and subsequently falls through the ascending neckline, Hello Pal could retrace toward the 20-cent level in the future, which is the 46% measured move of the pattern.
A lower ascending trendline has been propping Hello Pal up since Sept. 20, which may act as support if the stock drops through the neckline.
Whether or not Hello Pal can hold above the neckline and ascending trendline likely depends on whether the crypto market is able to make a bullish turnaround.
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- Bulls want to see Hello Pal continue to bounce up from the neckline and print a higher high above Wednesday’s high-of-day price. There is resistance above at 47 cents and the 54-cent area.
- Bears want to see big bearish volume come in and drop Hello Pal through the neckline, which will cause the stock to lose support at 40 cents. Below the level there is further support at 35 cents and the 20-cent level.
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