This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook.
August Feeder Cattle:
Buying on a hold of strong support and a test of the 50% retracement. The Relative Strength Index (RSI) indicator is also showing the market to be oversold at this point.
August Feeder Cattle has found a strong support level of 150.25. This is also a 50% retracement of the low of 136.00 in September and the high of 164.40 in mid-March. I look for a bit of retracement to get long this market through the remainder of the summer.
I look to get involved at this level of old resistance and now new support.
BUYING the August Feeder Cattle contract at 150.25 on a limit (Good Til Cancelled) …last trade 151.20
***You alone know your risk and reward parameters that you have set for yourself. The levels below are my ideas and strictly for informational purposes. The risk of loss in trading futures contracts or commodity options can be substantial.***
—Risk #1 would be 148.25
—Risk #2 would be 146.25
—Objective #1 would be 158.25
—Objective #2 would be 160.25
For those who prefer option trades:
Consider buying the August Feeder Cattle 158.00 call with 145 days until expiration for roughly 200 points or $1,000.00.
Risk would be the cost of the option plus fees
It may not be possible to limit losses to the exact loss limit depending upon market conditions and the possibility of limit moves.
Have a look:
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.