Some update to my previous post (pls see link below).
Cotton has been trading in a thin range for about a month now.
The Price action itself (and naturally the DMI-ADX combo and the Ichimoku setup) still tells us there is no trend right now, just moving sideaway, but since my last post there are some minor changes which may be slightly increasing the chance of a trend reversal.
- Price moved out of the bullish wedge, and retested it two days ago.
- If you switch to weekly time frame, there is a good chance this week's close can become an inside hammer, which together with weekly bullish MACD can be a good signal for a possible reversal.
- Chikou Span is hitting Price candles, that is confirming that Price action turning from strategic bearish to neutral
- Tenkan stays together with Kijun, in case of a close above first important Key sup/res level, these two averages can quickly make a weak bullish cross
What to watch now? Very simple, look at only the Price action at the key horizontal levels:
- first level is at 61,20 -> agressive Long entry at/above 61,35 closing as marked on the chart, but make sure you adjust your stop and position sizing properly according to you risk taking capacity
- second level is at 63,35 (this would be a confirmation level for a firm trend reversal) -> conservative entry is only at/above 63,35 (classic Kumo breakout strategy)
p.s.: If Price breaks back below 58,50 low, before the entry could be triggered, that will invalidate the trade setup idea.
Cotton has been trading in a thin range for about a month now.
The Price action itself (and naturally the DMI-ADX combo and the Ichimoku setup) still tells us there is no trend right now, just moving sideaway, but since my last post there are some minor changes which may be slightly increasing the chance of a trend reversal.
- Price moved out of the bullish wedge, and retested it two days ago.
- If you switch to weekly time frame, there is a good chance this week's close can become an inside hammer, which together with weekly bullish MACD can be a good signal for a possible reversal.
- Chikou Span is hitting Price candles, that is confirming that Price action turning from strategic bearish to neutral
- Tenkan stays together with Kijun, in case of a close above first important Key sup/res level, these two averages can quickly make a weak bullish cross
What to watch now? Very simple, look at only the Price action at the key horizontal levels:
- first level is at 61,20 -> agressive Long entry at/above 61,35 closing as marked on the chart, but make sure you adjust your stop and position sizing properly according to you risk taking capacity
- second level is at 63,35 (this would be a confirmation level for a firm trend reversal) -> conservative entry is only at/above 63,35 (classic Kumo breakout strategy)
p.s.: If Price breaks back below 58,50 low, before the entry could be triggered, that will invalidate the trade setup idea.
