CSR trends well when it rallies. A backtest from 2012 showed 3 winning trades and one losing trade with a 162% yield. Buy rules required 2 consecutive weekly closes above a valid downtrend line and a higher trough followed by a higher high. My educational material suggests buying only when a new uptrend has formed but CSR doesn’t seem to require that extra comfort of an uptrend – and of course waiting for the uptrend would eat into profit a little. That said the technique I teach would also have worked with CSR.

The rub is that I was looking at CSR as trade at the moment and the recent fall was only 10 bars (so not a valid downtrend) and the new rise has only made 10 higher bars – so no uptrend either. In the video I point out that it would be a breach of the trading rules to buy on this basis, but it did occure to me afterwards that there are other rules that are not in my educational material (but will be in my Advanced Course) that would allow me to enter this trade. Because the Covid fall wasn't a downtrend it means the previous uptrend is still in force and hence my initial concerns that price hadn't formed an upterend were ill-conceived. I'd still like to see price break the upper boundary of the potential triangle forming at the moment. If it does I'll probably be in.

Coming of the long term support line (blue dashed line) and having seemingly made an Elliott Wave 1 and 2  (assuming Wave 2 has finished and price doesn’t fall lower, that is) I feel the probability of price going higher is better than the probability of falling. With the way sugar has been running out the supermarkets with everyone honing their cooking skills in lockdown – you never know!

 

Contact

Robert Norman

Phone: 0428 346 951
Email: robert@sharecharting.com.au

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