Trading the Trend: long copper
Since we believe that recent downtrend in the front month copper futures contract has probably ended within a major support zone, we would like to go long with a stop loss at 7,849 and an upside target around the 8,500 mark.
(Video Transcript)
Long soyabeans looking profitable in future
Hello and welcome to this week's Trading the Trend on Wednesday 18 October 2023. At the end of September, we went long soyabeans, as you can see here, the front month futures contract, and we did so at around 1,322, but then the price of soyabeans continued to slide.
But we didn’t get stopped out because our stop loss was below the low seen back at the end of June, we placed it, I believe, at 1,245. So, we haven't been stopped out even though the soybean price continued to slide. And now that it is rising again, we're basically back to where we started this trade at.
So what I suggest you now do, because we've held three times in a row in this sort of support area, is to raise your stop loss level to just below the late June low at 1,256 and let this one run with regards to future potential profits.
Long the NASDAQ 100 worked out well
Last week, I went long the NASDAQ 100. And for those of you who didn't cash in any profits, because it straight away ended up with about 200, 250 points in profit, so that trade worked out really, really well.
For those of you who haven't gone out of it, you can let this one run, keep the stop for a longer-term position where it was beforehand, below the low at 14,430, the late September low, and just let this one run.
Or if you trade it in the shorter term timeframes, you can cash in your profits now. Or you could place your stop loss just below the last reaction low here, below 14,932, if you just wanted to hold it for the short-term and hope that the market continues to rise in the days ahead.
Long copper looks like a viable option
And this brings me to this week's Trading the Trend. Now, usually what we do with Trading the Trend is follow the direction of the trend. And that's the whole purpose of trend trading.
What I’d like to do this time is see an end of a trend and try to trade in the opposite direction.
And the reason is that I believe that the decline we've seen since the end of July is just an abc Elliott Wave correction, and that we've held once again, around the 7,800 area.
And we can see here, if I zoom out, that going back to January of this year, and even November of last year, every time we went down towards 7,900 to 7,850, the copper price held and then bounced off there.
So I expect a similar bounce to happen this time round, which is why I would like to go long copper around current levels around 8,035, with a stop loss though below the November lows at 7,849 and an upside target around the 8,500 area.
So, this week's Trading the Trend is to go long copper at around 8,035 with a stop loss at 7,849 and an upside target around the 8,500 mark.
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