Copper Wave Analysis
Diupdate
Potential long position forming with Copper on daily chart. Using simple wave analysis, Ichimoku overlay, OBV and MACD indicators, signs of a trend reversal in Copper are showing adequate confluence. The daily chart for copper is a good example of plotting Elliot waves. As you can see, ABC corrective waves has fallen between impulsive waves 3 and 4. This is a good general signal of the continuation of the impulsive wave structure.
The Ichimoku indicator is a very reliable indicator in my opinion for confirming trend reversals. When the conversion line (blue line) crosses above the base line (yellow line) following a re-tracement it almost always signals a confirmation signal to the new direction of the trend. Its limitations (perhaps in this case, too early to tell) is that it can give false signals if the security is not clearly trending, as in its forming a triangle or bound in a tight horizontal channel.
The MACD shows that a cross over has already occurred and looks to continue to move higher. The On Balance Volume indicator is showing signs of divergence between the lower lows of Copper and the OBV price line, however, the divergence is not strong but adequate.
Volume is at very low levels which is always a good forward signal of an impulsive move in either direction. For a strong confirmatory long position, wait for a definite cross over in the Ichimoku base and conversion line. It is best to place a buy after a candle has completely closed above the conversion line. Other confirmatory signals such as increased volume and a strong positive move in the OBV are also solid signals of a beginning trend.
Watch it closely the next week to see if it is starting a new trend or forming a triangle/flag/wedge.
The Ichimoku indicator is a very reliable indicator in my opinion for confirming trend reversals. When the conversion line (blue line) crosses above the base line (yellow line) following a re-tracement it almost always signals a confirmation signal to the new direction of the trend. Its limitations (perhaps in this case, too early to tell) is that it can give false signals if the security is not clearly trending, as in its forming a triangle or bound in a tight horizontal channel.
The MACD shows that a cross over has already occurred and looks to continue to move higher. The On Balance Volume indicator is showing signs of divergence between the lower lows of Copper and the OBV price line, however, the divergence is not strong but adequate.
Volume is at very low levels which is always a good forward signal of an impulsive move in either direction. For a strong confirmatory long position, wait for a definite cross over in the Ichimoku base and conversion line. It is best to place a buy after a candle has completely closed above the conversion line. Other confirmatory signals such as increased volume and a strong positive move in the OBV are also solid signals of a beginning trend.
Watch it closely the next week to see if it is starting a new trend or forming a triangle/flag/wedge.
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As you can see, it was a quick market jump before a continued a decline. Follow me and look into my recent posts, I have updated my position on copper, gold and other popular commodities.
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