Trend Reversal Trading Strategy CIG-NYSE

04/03/14 –  This is a Trend Reversal Trade that has 7/8 indicators in the green for this strategy and could present some great potential returns.  The price has broken the long term Trend Channel and I have entered the trade @ 5.87 with a Stop Loss @ 5.20, with the initial target price of 7.20 near the Wave 4 extreme price.  This stock is not available for Spread betting and so I have decided to add it to my Shares portfolio in my share dealing account (I have included this in my diary at the request of a few subscribers that have asked me to include these portfolio type of trades in the future).  The same trend reversal trading strategy rules apply for me when buying physical shares as they do when Spread Betting or trading CFD’s, the only difference is the risk factor.  I have purchased 100 shares at 5.87 and together with the share purchase charge I have used only 0.5% of my share dealing account.  This is the first time I have added to this portfolio in a while and will continue to report on any further purchases and to remind you that this is  different account to my main trading account. This is a great opportunity to go through a Trend Reversal Trading Strategy live as it un-folds. As Below

CIG#2   CIG#1

28/03/14 – This Trend Reversal Trade  is going well in these early stages with a False bar Stochastic being formed at the top of the Stochastic graph indicating a Bullish Trend. Also note that the price has risen above the 200 day moving average (pink line) which is  strong indicator that this trend reversal to a Bull Trend is strong.  The next critical point for this trade is the price around the W4 of the original bearish trend which I have indicated with Yellow down arrows purposely as this will act as resistance to further movement up, which if broken gives further strength to this new Bullish Trend.  It is most likely, however, to cause an initial pull back of the price to form a W4 for this Bull Trend, which is typical with my trend reversal strategy.  I have moved the Sop Loss to 5.94 which is above the entry point but critically below the price of the W1 high.  This is because I want to give the trade space to work if a W4 pull back is to occur but if the price falls below the W1 high then this trend reversal is cancelled and it was just a correction and I want to protect against making a loss.  This is now a risk free trade and the next 5-10 bars (days) will be very important for this trade.  As Below

CIG#4

17/05/14 – After a good rise during March & April the price for this stock seems to be range bound.  However last week it tried to punch out of the target zone and formed a new W3 high.  The target zone is acting as resistance to further gains at the moment and a good run of days on the US Markets my help this trade.  At the moment this trade could pull back slightly and form a W4 so I am leaving the Trailing Stop at just above Break Even and slightly below the W1 high.  I want to give this trade plenty of room to work as with most Trend Reversal trades, this one seems to be taking a breather but still testing new highs.  A great deal of ptience is required when using my trend reversal trading strategy.  As Below

CIG#7

21/06/14 – The price has now broken through the original target zone for this trade and is at the next line of resistance around the 8.30 price.  I have adjusted the Trailing Stop to 7.59 at the bottom of the original target zone, which locks in 2.5% profit on my Trading Account Balance for this trade.  I will look to adjust higher if and when the price clears the next line of resistance at which it currently resides.  This trade has been on for some time now and so I have included two images for this post so that now you can see a clearer picture of the current position in the top image and the overall position for the whole trade in the lower chart.  So far this has been a great example of my trend reversal trading strategy and now my Trade Management is vital to ensure maximum profits are achievable. As Below

trend reversal trading strategy

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CIG#11

19/07/14 – My trend reversal trading strategy at it’s best for this trade.  This stock has made a new Wave 5 high on Friday 18th July 2014 for this current Bullish movement.  It has hit the next level of resistance at 8.60 and has its work cut out over the summer to break through as traditionally during the summer volumes are low and momentum can be broken in the markets. I have decided NOT to adjust my Trailing Stop as it is comfortably just below a major level of support, whilst still locking in great profits for this trade.  I would like to see the price break through this current level of resistance and consistently close above before adjusting the Trailing Stop to lock in more profits.  As Below

trend reversal trading strategy

26/07/14 – Last Monday the price broke through the resistance level at 8.60, then consistently closed above it for the rest of the week. This level can now be classed as a support level.  I must start to lock in more profits with this trend reversal trading strategy trade, so I have adjusted the Trailing Stop to 7.93 which locks in 3% profit on my trading account balance.  This is still a conservative adjustment below the lows of the last 10 bars (days) as I would like to see the strength of this new support level over the next week.  If the price consistently closes above this level, or in fact tests the level and bounce back up during next week then I would consider moving the Trailing Stop to 8.51, just below the current support level.  Again a softly softly approach with this trend reversal trading strategy as I want to take advantage of what could be an even bigger move.  The next major resistance though is between 9.40 and 9.60, which could halt the progress of this trade during August.  As Below

trend reversal trading strategy

11/08/14 – This Trend Reversal Trading Strategy trade on CIG is turning into a text book case.  The long term trend line support level seems to be holding at the moment with the price currently stuck up in a resistance level around the 8.60 price. I have decided to be a littler more aggressive with the Trailing Stop placement from now on and have adjusted it to 8.10 locking in 3.25% profit on my trading account balance. This placement is below the trend line support which if broken could see the end of this bullish trend so I will keep adjusting the trailing stop in line with this support level, whilst giving a little buffer for dips out of the trend line.  Chart as below

trend reversal trading strategy

26/08/14 – The past 3 weeks (21 bars) on this trade has seen the price somewhat range bound which one would expect during August. The long term trend channel support has been tested but is holding at the moment, but this current side ways movement in the price action is going to be converging with this support level before the end of the week.  This Trend Reversal Trading Strategy trade has now been on for 5 months and may be running out of steam, so I have decided to be a little more aggressive with my adjustment of the Trailing Stop whilst still allowing the trade to do its thing.  The Trailing Stop is now at 8.45 which is well below the long term trend line support,  the lows of the last 7 bars (trading days) and in line with my 6/4 Moving Average Low line (red MA line).  This now locks in 3.75% profit on my trading account balance and importantly allows the trade a chance to test the trend line support level.  Could this text book Trend Reversal Trading Strategy trade be coming to an end? Charts as Below

trend reversal trading strategy

CIG#22

26/08/14 – My Long Term Trend Reversal Trading Strategy trade on CIG-NYSE has closed out!  With a large movement below the long term trend line support, my trailing stop has been taken out, giving a great 3.75% profit on my trading account balance.  This trade has been on for 5 months and has fitted well into my sausage machine strategy as a long term ingredient. It has performed well as a text book Trend Reversal Trading Strategy that I will use in my book that I am planning at the moment.  Chart as Below

trend reversal trading strategy

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paul.bratby@hotmail.com'

2 thoughts on “Trend Reversal Trading Strategy CIG-NYSE

  • jamesdhollingsworth@hotmail.com'
    November 16, 2014 at 11:34 pm
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    I took a huge hit on this stock and am wondering did you stop out when and are you gettting back in as even with the dividends I am way down. So do I keep running with it and buy more to wait on the 2015 dividends and gains to catch up and sell covered calls. Thanks for your advice and posts.

    Reply
  • paul.bratby@hotmail.com'
    November 17, 2014 at 7:50 am
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    Technically the price is coming up on a major support level between 4.67 and 4.27. The way this stock behaves, it wouldn’t surprise me if we had a reversal of the Bearish Trend back to the upside. The only thing working against that at the moment is the high volumes of wed, thur, frid last week, which obviously took strong Bearish Momentum into the weekend. This trade above was on a Daily Chart, but I am really liking the setup on a Weekly Chart for a similar Trend Reversal if the support level mentioned hold over the next few weeks. If we do see another trend reversal to the upside, I would suggest taking profits if you can around the $9 as this stock is a roller coaster.

    Reply

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