***After posting the chart, for some reason I don't know, probably a technical error, the hammer became a piercing line pattern. So no hammer, but piercing line***
First of all, I need to say that the trade has no confirmation yet, but it's starting to look bullish.
As you can see, CME rallied to 85$ and formed a double top. Target was at 72$, and respected it, without a big fight, closing below the first strong support zone at 78$ with ease.
Now, it's looking like a double bottom at a good daily support area, close to a very very strong weekly support, and a psychological level. There is a hammer at the current level, but I always wait for confirmation. Looking at the histogram, we can see a nice bullish divergence forming, bulls being much weeker now than a few weeks ago. Looking at the MACD lines, we have a class B bullish divergence. As I wrote in the chart, histogram is going flat, not higher, so neither divergence is confirmed yet, they are still forming.
So, we don't have candle confirmation and no divergence confirmation, so it's good to be patient. As long as we stay on top of the weekly support area, I'm looking to buy.
Comments
sublimares2
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Too many coincidences then it's not a coincidence- nice copy-paste
You are sick! If you would have bothered to look at my charts you would see it is the same type of analysis, IDIOT!
sublimares2
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Still valid what I posted above. Since I know your league so well I had to marque the self-victimization role that you are playing. You run with the first prize on insulting. Thank you for the laugh.
vlad.adrian
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07.03.2014 First target of the double bottom formation (previous high) has been reached.
sublimares2
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Nice chart yet I doubt of the bullish divergence noted on the chart. It is already below MA200 and price going further under 70.5 might stop somewhere around 63 if no gap down is involved. I would consider this one short term bullish. I just noticed something is wrong with displaying of MA200 comparing with other platforms.
vlad.adrian
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Ur right, as I said, the divergence isn't confirmed yet. As for long term moving averages, I don't really use them. This ideea is only for the short term
sublimares2
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There is no bullish divergence and no reason to believe in a confirmation as long as something is not existing. MA is a good tool for finding many things from a technical perspective - very useful and very telling. I dare to think into a continuation pattern formation like symmetrical triangle and taken the pivot low of the last corrective wave- it will give a good target on the downside. Good charting Vlad
vlad.adrian
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Hello, can you please give more details about how you use long term moving avereges??
Regarding the divergence, today it has been confirmed, histogram going higher. For some reason, after posting the chart, the hammer became a piercing line, don't know high but I'm 99% sure that it was a hammer when I drew the chart. Confirmation for the piercing line too, with a good day up
sublimares2
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No reason to speculate over the mysterious candlestick change of appearance. I noticed the same over and over again- luckily, I took a copy of a chart made in a weekend and by Monday the appearance of the candlestick formation was different. I do not count on the candlestick formation pattern - not much reliability. The same goes for the gaps on the daily chart. Moving averages on different chart frame is useful to see the whole trend direction, support and resistances. I added a chart of CME and also some MAs and an EMA. It can be useful also other values for MA /EMA. I can see there were like 3 attempts to cross above MA50 and failed. The price is also below MA200 and is a question if there is enough demand to put this stock into an uptrend again. The uptrend line is broken, MA50 is falling while MA200 is rising - close to a crossover?. Price is resting (support) at EMA250 but is it strong enough? MA50 is likely to play the reversal level. There are more resistances than supports at this level.
vlad.adrian
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I see what you mean... I tried finding a strategy using moving averages and I couldn't find one that makes money, because of choppy markets. Please don't understand that I'm insulting your strategy, maybe it is a very good one. Your strategy is more trendbased, my suggestion was a swing trade. You can't compare these two trading aproaches. I don't know if CME will start a new uptrend, I just saw a double bottom and saw a long opportunity, only for a few days. Using long period MA like you do will give you longer term trades, so on the long term you might be right, Cme will fall.
4-traders.com/CME-GROUP-INC-3782767/technical_analysis-full/