Trade idea: copper’s corrective phase
Elliott Wave theory is difficult to identify until the long term move is largely over. The uptrend on copper is now in the corrective phase after having passed through the initial impulse phase of five waves.
As IGTV’s Jeremy Naylor explains, while there is still some way to go to complete the five-up three-down with us now seeing the recent upturn in copper, it is becoming clearer that there’s a short rally before another downturn in price action.
(AI Video Summary)
Elliott Wave pattern observed in copper trade
In this video about trading copper, Jeremy Naylor explains a special pattern called the Elliott Wave pattern. This pattern consists of five impulse waves, and it's important that the fourth wave doesn't go lower than the first wave. However, there has been a slight breach in this rule, but overall, the pattern still fits the Elliott Wave principles.
Right now, copper is in a correction phase, which means it's going through a bit of a setback. This correction phase is made up of three parts - the ABC retracement. Currently, copper is rebounding from the low point of the correction, but it's uncertain how high this rebound will go or when the setback will start again. However, the author expects the rally to continue for a while.
Setting stop loss level
For those who are investing in copper, Naylor suggests setting a stop loss level at 83. This means if the price of copper drops to 83, it's a good idea to sell your copper investments. He predicts that the price may go up to around 86 or 87 before starting the next setback, which is expected to be lower than the previous low point.
Naylor does acknowledge that there are some uncertainties in this pattern, but mentions an important factor that affects copper's movement - its supply. If the supply of copper is limited, prices tend to go up, which supports the technical analysis he's presented.
Naylor plans to keep providing more updates as the situation develops in the next few days and weeks. So, if you're interested in trading copper, it would be a good idea to stay tuned for their future videos.
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