Pick a Bale of Cotton

Another potential contrarian play is setting up in Cotton. The Cotton ETF ($BAL) has looks horrible since the beginning of May. After a leg lower to 52 it consolidated for a month before making another leg down. It has reached the Measured Move lower now and is consolidating again. With this leg and consolidation though the RSI has moved into the teens and held there for a week. Perhaps it is just too oversold.

bal

For the aggressive trader a long bet against a stop at Last Friday’s low may get you stopped out or in at the bottom for a ride higher. For the more conservative crowd, keep watching and listening to Lead Belly until you see a new closing higher over 46.35. The pick your bale of cotton.

Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.

____________________________________________________________________________________________________

Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through June 2014 Expiry and sign up here

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus
Dragonfly Caps Blog