02 Oct Cable (GBP:USD) Heading Towards Major Support for Long Entry
My last Cable Swing Trade was a long, I remained long as it topped out and it was suggested by Wernluck (See favourite links for his charts) at that precise topping moment that a possible major top was in.
I wasn’t so sure so I let my trailing stop do what it was being paid to do… and sure enough a day or 2 later I was stopped out.
Looking back now I really wish I’d switched short because the down trend that we’ve seen over the last 6 weeks has been nice and swift.
As it stands now, Cable bounced from major support in the 1.5350 area and has since retraced to the daily 20MA. This support is so strong that a break of it would have me short without hesitation, but until that happens I’m looking to enter long from there.
You might ask why I’m not already long as it’s already bounced from this support once, well, you’ll notice with Cable that one touch is almost never enough…. it likes to revisit both Supports and Resistances before making it’s next directional decision, check out previous tests of 1.5350 on the chart to see what I mean.
I will look to enter long if 1.5350 is retested ideally looking for 1 or 2 daily closes above it, candle wicks poking through it will not put me off.
The Orange line on the chart is an area that a weak rebound might find resistance, or, an area to short from if it’s reached prior to the 1.5350 re-test. Ultimately, I’d like to enter long at 1.5350 with a target of 1.5980. That might be a far fetched call and I’m definitely not confident of it happening, but if the signals are there it’s gotta be worth a go. More compelling is the fact that if the current 1.5328 low holds, then 1.5980 would make precisely a 50% retrace of the whole move down.
This is definitely one to watch, and one that is getting close to materialising.
The eagle eyed amongst you may consider a potential long term Head and Shoulders formation in the making, with the November 2010 peak being the left shoulder.