KWS SAAT SE & CO. KGAA - Long opportunity
According to the Elliott Wave Theory, KWS is currently showing potential for a rally, coinciding with the beginning of a new long-term impulse. Since September 2018, KWS has been undergoing a correction, graphically represented by the drawn ABC. The C wave is not yet complete, but the final 5th wave is underway and forming a wedge pattern. Its completion could coincide with the breaking of the wedge. In this case, it would signal the end of wave 5 < wave C and the beginning of wave 1 < wave 1 of a new impulse. Moreover, another reversal signal is provided by the divergence between RSI and the price.
The entry point for this trade should be the breaking point of the wedge, approximately €53 - €53.5, or the breaking of the 56.22 level of the RSI. I am going to set a stop loss 1.5% below the first static support, at €49.65. The first take profit is set at €61.1 (a profit of 14.2%). This is considered a prudent scenario, in case the breaking of the wedge forms wave 4 < wave 5 < wave A. Otherwise, it is possible to play this trade with a trailing stop loss and see if the price could reach the first important resistance at €67.5 (a profit of 26.17%).
NB: trade with €€€ (it could be a chance to diversify)
The entry point for this trade should be the breaking point of the wedge, approximately €53 - €53.5, or the breaking of the 56.22 level of the RSI. I am going to set a stop loss 1.5% below the first static support, at €49.65. The first take profit is set at €61.1 (a profit of 14.2%). This is considered a prudent scenario, in case the breaking of the wedge forms wave 4 < wave 5 < wave A. Otherwise, it is possible to play this trade with a trailing stop loss and see if the price could reach the first important resistance at €67.5 (a profit of 26.17%).
NB: trade with €€€ (it could be a chance to diversify)
- 1/3 at the closing above of the static resistance of the RSI - done
- 1/3 at the closing above of the dynamic resistance of the RSI
- 1/3 at the breakout of the wedge