Category Archives: 240 minutes charts

GBPAUD 240 minute – More Detail

Following on from yesterday’s webinar in which I commented on this pair I have received a number of emails asking me to look at it in more detail. The methodology that we use seeks at an early stage to recognise and define the path of price of a vehicle. Using pitchforks allows us to monitor the strengthening and weakening of trend along the line of ascent or descent.

In this instance having identified A, B and C pivots I drew the Schiff (or unmodified Schiff) pitchfork shown in Chart 1. This is a variant which moves the origin of the pitchfork 50% of the distance from Pivot A to Pivot B in terms of price but not in terms of time. Having drawn the pitchfork we need to validate it, by which I mean that we have to ensure that price action is occurring along the angle of the fork. The first, and very definite, indication of this is shown in the red circle as price exactly touched and then rejected away from the Upper Parallel as shown in the red circle.

gbpaud-240-chart1

Price fell from there beneath the Lower Parallel and found support along the dotted Sliding Parallel. During the webinar I tried to stress that it was not the lines of the fork itself that were important but the angle of ascent or descent that they followed. We do not immediately discard the fork just because price moved below the Lower Parallel – we would still be pretty confident from the Upper Parallel touch that we were defining the angle of ascent so would continue to look for further confirmation by means of continued support or resistance in the line of the fork. I focused in on the Sliding Parallel support, highlighting the arrowed bar, which showed a very strong move up and through the Lower Parallel, closing very close to its highs. In a counterintuitive way, the fact that it took such a strong bar to re-enter the fork does indeed further validate it.

In the webinar I noted how price moved higher to find resistance along the Median Line of the fork and how support stepped up to a line along the Quartile as shown in the series of red circles. I pointed out how a long trade could have been taken from this Quartile support, with a stop of as little as three points to place it below prior lows, and a target of the Median Line some 130 points higher. From the last in the series of red circles price move all the way to the puce highlighted Sliding Parallel – from 1.8050 to 1.8374.

Price has retraced somewhat form that level and we are currently looking to see continued support along the Median Line in the green circles. We have watched support step up from the Sliding Parallel beneath the Lower Parallel, to the Quartile and now potentially to the Median Line. All these levels have been in the line of the fork and we will look to continue to define the moves in this vehicle by means of this pitchfork.

I hope that I have been able to give more of an idea of the way that we use pitchforks to track vehicles by means of strengthening and weakening of trend along paths that we have identified. The analysis allows us to anticipate or predict areas of support and resistance with great accuracy and to use these to take high probability, low risk trades.

The following link takes you to a recording of the webinar dated July 9th :
http://www.coghlancapital.com/node/9300

The Cross Pair Analysis service looks  to cover a dozen+ non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

CADCHF 240 and 60 minutes – An Update

I wanted to have another look at this pair which I first presented here in early May. The methodology that we use seeks to identify the path of price at an early stage and then to delineate or define it by means of a pitchfork. It is not the pitchfork itself that is important but the angle ascent or descent that it follows. By matching price to this angle we can then monitor the strengthening or weakening of trend as it progresses.

cadchf-2-240-chart1

We last looked at this pair in the area of the puce circle in Chart 1. We had been following as price rose from the puce Sliding Parallel following the series of touches in the green circles and had noted the constant line of resistance as shown by the higher puce Sliding Parallel. The validation given by the price action along these lines was sufficient for us to continue to follow it. Note how price moved strongly higher from the last green circle running into resistance at the higher puce Sliding Parallel and then falling back to find support along the grey horizontal.

Although we spend the majority of our analysis looking at movements in the angle of our pitchfork we are not immune to what happens along the horizontal. Here the fact that resistance later became support was noticed and deemed to be bullish. From this support price moved higher again before running into resistance once more along the same puce Sliding Parallel. Note how we are following support stepping up in the angle of the fork – from the line of green circles, to the arrowed blue Sliding Parallel beneath the Median Line and now to a higher arrowed Sliding Parallel shown in green. It is normal to expect resistance to be put under pressure when we see support stepping up and members of the Cross Pair Analysis service have been aware of this and watching these moves unfold.

We are looking to see if there is enough upside pressure to push through the puce Sliding Parallel that has acted as resistance since early April. It is less the breach of this line itself that is important but more where we find support on any retracement. If, for example, price pushed above the line and came back to test it from above and found support along it that would be a bullish indicator and would have us looking to challenge the higher line of the Upper Parallel that had been resistance once before.

cadchf-2-60-chart2

One feature of the Cross Pair Analysis is that we look at vehicles across various timeframes. Chart 2 shows the same pair on a 60 minute basis and Chart 3 shows the same vehicle in more detail. Note how once more we use a distinct A, B and C to draw our pitchfork – this time it is a variant known as a Schiff or Unmodified Schiff. Here the origin of the fork is moved 50% in price from the A pivot to the B pivot.

Chat 3 shows the validation that we found on this fork – the series of red circles denoting the activity that we saw along the Median Line of the fork and which told us that we had correctly defined the path of price. Note how we use the same techniques to mark a strengthening of trend along the path of price. Resistance in mid-June along the quartile of the fork moved higher to the Sliding Parallel just under the Upper Parallel and support along the Median Line also moved up to the Sliding Parallel denoted by the up facing red arrows. (Note incidentally that when this puce Sliding Parallel support briefly breached that support was found along the Median Line once more…)

cadchf-2-60-chart3

In the last day or so the puce Sliding Parallel resistance has been breached to the upside and we have seen price come back and start to establish support along this same line. We potentially have a bullish higher channel forming with the puce Sliding Parallel as new support and a higher green Sliding Parallel as resistance. We will continue to monitor this chart and use the shorter timeframe as a “canary in the ine” for our longer timeframe 240 minute chart.

The Cross Pair Analysis service looks  to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch here:
http://www.coghlancapital.com/node/8759

I will be hosting another free webinar on Wednesday 9th July – registration is available at this link:
http://www.coghlancapital.com/node/9207

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

AUDNZD 240 and 60 minute – Changing Behaviour

In my last article I stated that I wanted to “note how the lines of the pitchfork are there to define the path of price rather than to act as inviolate supports and resistances. Median Line Analysis seeks to recognise and follow the trend of price – the angle of ascent or descent – and to delineate this path by means of the pitchfork. We are looking for validating action along the angle of the lines and for the strengthening or weakening of trend rather than whether or not the lines of the fork remain intact.” Since I wrote that, even though the vehicle has continued to the downside moving out of the pitchfork itself, the lines that we have delineated continue to allow us to track price.

Chart 1:

audnzd-b-240-chart1

Image 1 is an updated 240 minute chart and shows these recent moves. We had originally validated the fork – shown that it is correctly marking the path of price – by means of the puce Sliding Parallel, showing support and resistance, just above the Median Line. We were slightly wary of the lowering resistance in the angle of the pitchfork as shown by the series of puce circles. Lowering resistance can lead to lowering support and this is precisely what we saw.

From the fourth puce circle price fell very strongly through potential supports – notably the Lower Parallel. Weirdly, the fact that such a very strong bar took price through this line does validate the line – it took such a strong bar to breach the support. What next happened also caught my attention – the previous support of the Lower Parallel (as shown in the first red circle) then becomes resistance as shown in the second and third red circles. As on the horizontal when support then becomes resistance that is viewed as bearish.

When we see a spike low, the practice is to draw a Sliding Parallel off this bar and this is the case with the puce line with the green circles. Again we see the same pattern develop as above – the line of support drawn in the first green circle is breached and is then retested from underneath. The trend continues with price stepping down, with support becoming resistance. Despite price falling beneath the Lower Parallel of the fork we still use the lines of it to show the strengthening and weakening of trend.

Chart 2:

audnzd-b-240-chart2

Image 2 shows a 60 minute chart of the same vehicle and indicates how one could follow the move lower using the same methodology but in a different timeframe. Remember that what we are looking to do is to establish the path of price using the obvious pivots as the A, B and C of our fork.

Note the line of resistance that is quickly apparent along the Upper Parallel of the pitchfork – this would be enough to keep a careful watch on it for an indication as to future moves. Price does spike above this line to the Outer Quartile before falling very strongly and you will note that support emerges at the other Outer Quartile – there is some “balance” or “equilibrium” around the Median Line of the fork with one Outer Quartile being resistance and one being support.

Note how price moved from this Outer Quartile support and established a new channel – running between the resistance of the green Sliding Parallel and the support of the Lower Parallel. If anything the last few bars show that resistance may have lowered somewhat and it now appears to be along the line of the Quartile. I will continue to monitor this chart looking for any raising or lowering of these supports and resistances that we have noted – remember that it is strengthening or weakening of trend that we are following here. The 60 min chart gives early warning of what to expect on the 240 minute chart and I will obviously relate this chart to the larger one and will watch that for any further breaches of the supports and resistances that we have noted above.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

AUDNZD 240 min – Following the Slope

I wanted to take a look at this pair, and in doing so, note how the lines of the pitchfork are there to define the path of price rather than to act as inviolate supports and resistances. Median Line Analysis seeks to recognise and follow the trend of price – the angle of ascent or descent – and to delineate this path by means of the pitchfork. We are looking for validating action along the angle of the lines and for the strengthening or weakening of trend rather than whether or not the lines of the fork remain intact.

audnzd-240-chart1

Chart 1 shows the pitchfork we have been following on the 240 minute timeframe for this pair. The very distinct A, B and C points give us the pivots from which we can draw our pitchfork. The next task is to validate it ie to show that we are correctly describing the path of price by looking for price action along the angle of the lines that we have drawn. The obvious early indication of this is what happens along the puce Sliding Parallel as shown by the red arrows. A line of support just above the Median Line provides a very precise line of resistance when price rises to it once more. Having noted this, we would then be watching for further evidence that the pitchfork was providing support and resistance along its lines. Members of the Cross Pair Analysis service were prompted in the daily video analysis to look out for such support as we approached the Lower Parallel in the area of the first red circle.

This indeed provided support and a move from a low of 1.0751 eventually topped at 1.1039 once more along the highlighted Sliding Parallel that had been our prior line of resistance. This was a move of some 290 points from anticipated support to anticipated resistance using a simple but effective methodology.

One price reached the Sliding Parallel it proceeded to retrace – aided by pronouncements from the Bank of New Zealand. We watched how price fell strongly towards and eventually through the prior support of the Lower Parallel – a good lesson not to try to catch a falling knife. Rather than jumping in to a trade we wait for evidence that an established line is continuing to work. In this case we would only have got long at the Lower Parallel had we seen an initial reaction up and away from it, followed by a retest. If that had happened we would have looked to go long at the second touch with a stop below the previous (lower) first touch.

But that did not happen and instead we now find that price has dipped below the Lower Parallel. This does not mean that we immediately discard the fork – remember the important thing is it is the path of price that we are looking to define by means of the fork rather than the fork itself. Indeed the dip below the Lower Parallel can be of use in determining the future path of price – we will watch to see if a line of support (first red circle) now becomes a line of resistance (second red circle). This would be a bearish indicator and is something I am focussing on at the moment.

I have drawn a Sliding Parallel at the low of the dip and will also look to see if that line now becomes a continuing line of support. We potentially have a new channel forming with resistance along the underside of the Lower Parallel and support along the new Sliding Parallel. It is important to constantly monitor the charts as this channel is not yet validated – what it will do is show if the trend that we are following is strengthening or weakening. Remember that it does not matter that we are trading under the Lower Parallel – the fork is not invalidated – it is the path of price that we are following that is important…..

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Angle of Ascent – CADCHF 240 minute

Median Line Analysis using pitchforks seeks at an early stage to establish and then to define the path of price – the angle of ascent or descent of a vehicle. Having done this we then look to follow the strengthening or weakening of trend along the lines that we have drawn. The methodology allows us to predict likely areas of support and resistance in the line of the pitchfork with considerable accuracy.

cadchf-240-chart1

I have posted this chart before and noted how price has moved consistently along the angle of the pitchfork that we have drawn – how it has moved between support along the green Sliding Parallel and resistance along the puce one. An essential part of validating a pitchfork – determining whether we are indeed describing the path of price – is to look for continuing action in the angle of ascent (or descent) that we have drawn. In this case we noted the first red circle showing resistance at the Upper Parallel – something which caused us to keep a close watch on the fork for further confirmation. This came with activity along the Median Line of the fork where the line clearly showed both support and resistance as price evolved.

Specifically we watched how things developed along the puce Sliding Parallel – a series of exact touches and bounces as shown in the green circles were clear evidence of the line providing a constant line of support. The fourth green circle shows how price moved from the line at 0.7987 to a high of 0.8291 at the end of May.  A trader could have taken a low-risk, high-probability long trade from the puce Sliding Parallel, with a stop beneath previous low of 15-20 points.

Even though we spend the majority of our time following the movement of price in the angle of the pitchfork we are not immune to what happens on the horizontal. The vast majority of traders are looking at the latter patterns and the result is that price often reacts to these horizontal levels. In this case the grey line has provided both support and resistance to this vehicle as evidenced by the series of red circles.

What we do is try to put the package together. The initial move higher from the last green circle did encounter anticipated resistance in the second red circle along the horizontal. Median Line Analysis allowed us to follow support stepping up in the angle of the fork from the puce Sliding Parallel to the previously active Median Line and this led us to anticipate that price would indeed move higher. It pushed through the horizontal – falling back to find support along it – before reaching anticipated resistance a couple of times along the line of the green Sliding Parallel.

Since the last high in the first puce circle price has dropped back somewhat – it appears to be potentially lowering in the line of the fork. The three puce circles show resistance at the green Sliding Parallel, then beneath it at the blue dashed quartile and lastly at a slightly lower level once more. It must be stressed that these moves have not yet played themselves out and price could push higher once more, likely to the anticipated Sliding Parallel resistance or even higher to the Upper Parallel. However the potential lowering of resistance is something we will follow over the coming bars. We are also noting how price has once more found support along the grey horizontal – you could argue that we were effectively forming a wedge in the line of the fork.

As I stated earlier we use the strengthening and weakening of trend along the lines of the pitchfork to determine the movements of price of a vehicle. I hope I have shown how the methodology can give us high probability areas of support and resistance within the trend that we have identified.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Tracking the Pair – EURAUD 240 minute

Over the past eighteen months Cross Pair Analysis members have tracked the movement of this pair from a low in August 2012 of 1.16 to a high in January 2014 of just over 1.58. Since then we have followed as price has declined to a recent low of 1.4505.

Median Line Analysis using pitchforks seeks to recognise and define the path of price of a vehicle and to monitor the strengthening and weakening of trend within the lines that we have drawn. It does not always suit traders to use the Daily timeframe so in the Chart I present a recent pitchfork on a 240 minute basis that we are currently using to determine this variance in trend.

euraud-240

The methodology involves using distinct A, B and C pivots and drawing the pitchfork to best determine the all-important path of price. In this case the variant we are using is known as a “Schiff” or “Unmodified Schiff” pitchfork whereby the origin of the fork is moved 50% of the distance from the A pivot to the B pivot in price but not in time. Having drawn the pitchfork we look to see if we can validate it ie if we see price action along the angle of the lines that we have drawn.

In this case we quickly note what is happening in terms of resistance along the Upper Parallel in the area of the green circle. The untested or previously unproven line provides a line of resistance to price which proceeds to fall from about 1.4980 to the third red arrow at just over 1.4550.

Median Line Analysis allows us to predict with great accuracy likely areas of support and resistance and you will note how the third red arrow lies along a green Sliding Parallel emanating from the low at the first red arrow.  Until we see consistent support or resistance along such a line we do not know whether or not it is indeed a Sliding Parallel. However given that we are confident that we have correctly described the path of price – the angle along which the vehicle is moving – it is certainly an area that we would be closely watching as price approached it. The fact that we have had not two but three bounces along this line adds to our confidence in it.

Price rose from this third touch at 1.4550 all the way back to 1.4870 and another line of anticipated resistance, our old friend the Upper Parallel. The first down facing red arrow shows this action very well and how, after a double tap, price then fell away from this resistance once more. Not only that, but we now seem to be establishing a line of resistance slightly lower in the fork – this is shown by the red dotted Sliding Parallel and the series of red down facing arrows.

We need to monitor this vehicle closely as we are potentially seeing a rising of support as well. After the support along the green Sliding Parallel we could argue that we are seeing a stepping up of support as indicated by the last two up facing red arrows. They are potentially showing that we are finding support along the Median Line of the fork. Effectively we are seeing a wedge developing in the pitchfork with rising support and lowering resistance. We will continue to monitor the char looking for strengthening or weakening of trend along the lines that we have drawn to describe the path of price. This pitchfork is particularly relevant because our analysis of the Daily timeframe (not shown here) indicates that we are potentially at an important point in terms of price.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Charting a Breach – GBPNZD Daily and 240 minute

Image 1 shows a Daily chart of the GBPNZD that I have shown in a previous article. I have discussed how Median Line Analysis allows us to track the path of price and the strengthening and weakening of trend along the angle of the pitchfork that we have drawn. The Cross Pair Analysis service has been following the evolution of this move and in particular tracking the support and resistance visible along the puce highlighted Sliding Parallels.

Image 1:

a1-gn

The anticipated support at the first red arrow would have allowed a long entry around 1.9218 and a stop below the previous low of 1.9196 with a potential target along the higher puce Sliding Parallel. The reason for this target was that we suspected that a line of prior support could potentially become a line of resistance. Price did move precisely to this line finding resistance at the first red down arrow at 1.9722 – a move of 500 points from entry.

From there it fell once again and we anticipated and saw support along the lower Sliding Parallel once more. On this occasion price touched it again at the second up arrow at 1.9277 and once more pushed higher to anticipated resistance along the same Sliding Parallel at 1.9764 – again a move of nearly 500 points. So after a cumulative move of approximately 1000 points we were certainly going to continue to follow the action of this pair.

We watch and trade the market across various timeframes and I think that it is instructional to look at Image 2 which shows the same pair on a 240 min basis. As I have explained, the essence of what we do is look to establish the path of price and the move through the lines of resistance of the red downfork led to the drawing of the blue one.

I drew this pitchfork very soon after price moved higher from what became the C point on 6th May. The reason that I immediately liked it was the series of green circled touches along the handle of the fork, indicating that indeed we were working in the angle of the fork. The Median Line touch and rejection in the first red circle followed by the first evidence of support at the first red arrow along the Lower Parallel increased my confidence. Price then dipped below the Lower Parallel and to many people this would be a reason to abandon the pitchfork and look again. However the methodology we utilise stresses the importance of the path of price rather than the sanctity of the lines of the fork itself. Indeed the second red circle shows how the Lower Parallel started working as a line of resistance indicating that the movement of price along the angle of the fork was still valid. Note how the bar marked with the second red arrow is a very strong bar – once it had managed to get above the resistance of the Lower Parallel, it is almost as if the pressure was released and it surged higher. This is all evidence that the pitchfork was working well.

Though we spend the majority of the time looking at the angle of ascent or descent it would be churlish to completely ignore what is happening on the horizontal – after all this is what most traders do and there are likely to be reactions to such lines. I drew the puce horizontal and warned that it might act as resistance – indeed it did how price moved up from the second red arrow at 1.9518 to the horizontal at 1.9764.

From there it fell back and not surprisingly found support once again along the Lower Parallel of the fork as indicated by the third and fourth red arrows. Median Line Analysis allowed us to anticipate such support and we continued to watch a wedge form between the blue Lower Parallel support and the puce horizontal line of resistance. Bearing in mind what we were watching on the Daily chart the breach of this horizontal and consequent backtest of support came as no great surprise.

Image 2:

a2-gn2

You will note that the blue fork is quite narrow and as time moved on the low on the 15th became more apparent. I therefore looked to see if I could use that as the C pivot of the pitchfork and found that it did indeed work well as shown in image 3. The green circles show the Sliding Parallel support that propelled price higher and the red circles show what looks to be Sliding Parallel resistance – though we need a few more bars and maybe a reaction to confirm this. I will continue to monitor this fork looking for strengthening and weakening of trend as well as following the fork shown in Image 2, which worked so well to take price through the puce horizontal on the 240 minute timeframe. On the Daily chart I will look to see whether price can stay above the highlighted Sliding Parallel and, should it fall back, whether that line of resistance becomes a line of support.

Image 3:

a3-gn3

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

A Quick Update – CADCHF 240 minute

I have looked at this vehicle in a previous article and discussed how it could be followed and traded using the methodology of Median Line Analysis. What we look to do at an early stage of a trend is to seek out and define the path of price of a pair and, having done that, use the lines of support and resistance that soon become apparent.

Chart 1:

a1-cc

Chart 1 is a copy of the one I discussed in early May. We had quickly established this all-important path of price as the CADCHF moved above and away from the declining red lines of resistance. We used the distinct A, B and C pivots to draw our pitchfork and looked to validate it, ie to see if there was any price action along the angle of the lines that we had drawn in order to show that we were indeed tracking the path of price. The Upper Parallel resistance, the Median Line resistance and the puce Sliding Parallel support all confirmed this and we noted how a trade from this last line would have been low-risk and high-probability. Resistance was seen at the green horizontal from the early April spike high.

Let’s take a look at Chart 2 and see what has developed since then. After the rise from 0.7987 in the fourth green circle to the horizontal at 0.8160 we saw a small retracement. It is apparent from the action along the Median Line of the pitchfork how important this line has been in providing support and resistance since the first red arrow at the beginning of April. I have highlighted other instances of this with more red arrows. You can clearly see that after the green horizontal touch price fell back and found support along this Median Line. We noted this prior line of resistance was becoming support – a bullish indicator in the same way as it would be if we were looking at lines on the horizontal. The stepping up of support from the puce Sliding Parallel to the Median Line indicated a strengthening of trend along the angle of the fork and it was no surprise when price pushed higher and broke through the horizontal green resistance.

Chart 2:

a2-cc99

Respecting the supports and resistance along the path that we had drawn we encountered a pause precisely where anticipated – along the Sliding Parallel from the late March high originally to be found as a blue dotted line in Chart 1 – changed to a puce line in Chart 2 so that it is more apparent. Once more we see a retracement from anticipated resistance in the puce circle and we note how the vehicle falls back before finding support along the green horizontal. Again resistance becoming support is bullish and we watch another move higher before once again encountering resistance at the same Sliding Parallel in the second puce circle.

I will continue to monitor and trade this chart using the lines of support and resistance that Median Line Analysis has allowed me to identify. If price pushes through the current Sliding Parallel resistance I will look to the Upper Parallel as the next likely line of resistance – it acted as such in early April. Obviously if the puce Sliding Parallel was breached and then in turn became support, that would be further bullish action. However, if price moves lower I will look for continued support along the green horizontal and, beneath that, along he Median Line of the fork. We are tracking the strengthening and weakening of trend along the path of price that we have identified.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Across Timeframes – AUDCHF

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 min ones. I wanted to look at this pair in further detail and expand on what I had previously written to include an explanation of how we look across timeframes in order to map and define how vehicles are moving.

Chart 1:

audchf240-chart1

We had been following the AUDCHF 240 minute chart shown in Chart 1 for some months by means of an Andrews’ fork originating in mid-December 2013. We use pitchforks to define and delineate the all-important path of price and seek to follow the strengthening and weakening of trend as the vehicle moves along. Using distinct A, B and C pivots we were alerted to the fact that this pitchfork was likely defining the path of price by the green circled action underneath the Lower Parallel in mid-March. To some people the fact that price was outside the Lower Parallel would disqualify the fork and start them looking for something else. Remember our focus is on the path of price – in other words it is the angle along which price runs that is important. In this case it happened to be beneath the Lower Parallel, but what sticks out is the fact that it was along the dotted Sliding Parallel.

We continued to follow price noting how it “stepped up” to find arrowed support along the Lower Parallel and then moved higher to find resistance along the Median Line. Note how the purple highlighted Sliding Parallel acted as support before price stepped down once again to once more find arrowed support along the Lower Parallel. We are watching previously proven lines of support and resistance given to us by our early definition of the path of price.

From the Lower Parallel price started stepping up once more – the series of arrows show this move. Note the penultimate arrow shows support along a Sliding Parallel that had previously acted both as support and then resistance. This is also the case with the final red arrow showing how once again the purple Sliding Parallel acted as resistance and then once more as support. As on the horizontal when a line of resistance becomes support that is viewed as bullish.

Chart 2:

audchf60-chart2

Chart 2 shows the same vehicle on a 60 minute timeframe and is something I have written about in a previous article. This smaller chart allows us to use the same methodology and techniques to look at the moves we have seen in Chart 1 but in finer detail. Without going into too much detail – this is found in the previous article – the third green circle shows a conjunction of support and a low-risk, high probability place to take a long trade. The resistance along the red Sliding Parallel became support in the same place as we witnessed an arrowed touch on the tested and proven blue Lower Parallel. Not surprisingly price took off from here and we have been tracking it closely ever since. We are watching it move in the channel defined by the two purple Sliding Parallels though are aware of a potential stepping up of support as shown by the red arrows. A stepping up of support will often lead to a stepping up of resistance too and we are currently watching to see whether we now push above the Sliding Parallel resistance and set a new, higher channel in the line of the fork. The move from the blue Lower Parallel at 0.8155 is now worth some 210 points for a risk of a 10 point stop beneath prior support.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Still Running Well – CADCHF 240

I received an email following my last post about the CADCHF 240 asking about resistance becoming support and what that tells us. When we are looking at moves in terms of the horizontal we deem it to be bullish if resistance breaches and then becomes support. It is exactly the same when using Median Line Analysis except instead of using the horizontal we are using the path of price as defined by the angle of the pitchfork. We are looking at support and resistance along these angles so it is logical to view a breach of such resistance followed by support along it in the same way as we do on the horizontal.

Chart 1:

cc240-2

The email referred specifically to an instance of this to be seen in Chart 1. In early March there was a red dotted line of Sliding Parallel resistance that I have marked with green circles. We had been following the pair in downtrend for some time via the red fork and noted how price popped above the red Upper Parallel before declining once more. We marked the high of this move with the Sliding Parallel and continued to watch the movement of price.

Once more it moved above the Upper Parallel and in the second green circle not only pushed through the Sliding Parallel but came back to test it from above. The successful breach and retest of this line was a further factor leading us to the idea that the pair was about to move higher. This was one of the indications that we used, in conjunction with others listed in the previous article, and led us to draw the blue pitchfork in an attempt to define the new path of price that this change of behaviour had engendered.

I have detailed the validation of the blue fork in the previous article and it is interesting to note how well the lines in the fork have worked since my last comments. Remember that what we are attempting to do is to define the path of price of a vehicle by means of the pitchfork, creating channels by means of high probability lines or areas of support or resistance. There has been a strong move up from one of these lines – the Sliding Parallel highlighted in puce. This was a line that we had previously determined was providing support – it was a solid floor. By taking advantage of this line – and note how there was no reason on the horizontal for support to exist there – a trader could have taken a long with not only a high probability of success but also a tight stop to safeguard the position.

A long from the last low along the Sliding Parallel would have been at 0.7987 with a stop below the prior low of 0.7970 and an initial target of the Median Line (prior resistance) at 0.8105. In fact price has spiked through this potential resistance and I would now be looking to see if the green horizontal at 0.8160 does anything, or perhaps higher along the blue Sliding Parallel in the area of 0.8220. If price fell back I would look to see if the prior resistance of the Median Line now became support. Median Line Analysis does not guarantee that particular lines work – nobody can do that – but it does provide very accurate areas to look at for potential support and resistance.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

I recently hosted a webinar looking at these pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018

I will be hosting another one on Tuesday 13th May – free registration available here:
https://www4.gotomeeting.com/register/145063263

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup