July Cotton – Short from 81.10 – Exit price @ 76.75 – Hit the Target! Cotton broke out of a three-point zigzag pattern o n May 27th. The market had just retested the upper parallel line and closed at the low of the daily price range. This failure signaled the end of the consolidation and triggered the sell signal at 81.10. The May 6th to May 19th reaction swing was used to project a future reversal date for June 7th and a target objective where the up-sloping reaction line intersected with the down-sloping median line. This intersection occurred at 76.00. Cotton continued to trade lower over the next seven trading sessions, finally trading to a low of 75.80 on June 7th, the projected reversal date, before reversing and closing 142 points off the low.
By John Crane
