Swing Trade in Cotton

This week we will be looking at Cotton as a potential swing trade. Lets start by looking at the weekly chart below.

Cotton made an impressive trend trade throughout 2014. Any short trend traders that sold this when the floor was removed made a huge return. Our focus will be on the tight consolidation that we are currently trading in. On the weekly chart we can see a descending wedge, and we know descending wedges are bullish in nature. But this being a swing trade, we are looking to sell and buy those areas inside the wedge.

CT

 

Our next trade inside this wedge will most likely be a short position. We want to sell this at 62.00-62.25 with our stop above 63.00. If we don’t get filled and cotton wants to sell off we would look to buy the bottom end of the range.

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