againstthegrain

SB #11 possible A-B-C correction

ICEUSA:SBH2015   Sugar #11
The awesome oscillator shows the downward trend is over by divergence between the 3 and 5. The next move appears to be the a-b-c correction that would form a wave A.
Fibo ratios are in place suggesting the next possible targets. Weekly chart turning bullish with MACD divergence.
I know the big drop today is somehow scaring (good volume tho), so to be on the “safe-side” I would suggest buying at levels close to today’s high with a stop-loss somewhere on the channeling (in light gray).
Bottom line: The end of a downward trend is clear and it gives a good opportunity to trade a correction wave with reasonably low risk.
Olu
2 years ago
Hi A. Thanks for your chart and observation. I will admit fridays's drop was a surprise and made me add another scenario to my bullish thoughts. What if your abc on the chart was the full extent of the retracement and price was going back down. If b is taken out it would be clear that the upmove was just a retracement and 5 will be taken out. So if my upmove is going to continue price needs to revers from near here to keep 17.00 area alive
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againstthegrain Olu
2 years ago
This is when good money management comes into play. On a short/mid run, adding longs at current levels would suggest a stop-loss somewhere around the 15-14 levels (depending on how much capital you are willing to risk) in case the ABC does not materialize.

What you see on the chart above is my preferred count. An alternate count, as you observed, could be to assume that abc would be the end of a corrective wave. However, in my view, this would not fully satisfy the classic fibo ratios (although we know that in high leveraged markets this is not uncommon)

From an “investment psychology” perspective, although bulls had won the last session’s battle (with good volume tho), they somehow fail to penetrate a more important support setting market below 15’s. They may have a second chance on Monday’s session; however, they must be convincing about it.

At any rate, it doesn’t seem to be a major retracement and then again here, money management is key.
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