For the Week of November 26, 2012
The Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.
Highlighting This Week’s Potential Breakouts:
December 2012 E-Mini NASDAQ
The December 2012 E-Mini NASDAQ contract closed above an upper trend line in a shortened Friday trading session. The highs making up the trend line are at 2840.75 (10/05/12), 2778.75 (10/17/12), and 2691.75 (11/06/12). The market has been rallying since testing, and failing, to close below previous support just above 2500.00. The market has already rallied more than 33% of the sell-off from the twelve month high made on September 21 at 2871.25 to the recent low made on November 16 at 2492.00. A 50% Fibonacci Retracement (2681.88) could be a first target as there may be some resistance near that level and recent highs (2691.75, 11/06/12). The MACD indicator crossed over to a bullish signal below the baseline and the ADX is strong at 35.45 signaling strength in Momentum. The Stochastic indicator is bullish as well. Ideally a long entry can be taken on a pullback closer to the trend line. The Trend Seeker (a US Chart Company tool to help identify market trend) is Down but that may change to an Uptrend with Friday’s bullish trading activity.
January 2013 Natural Gas
The January 2013 Natural Gas contract is setting up to breakout to the upside. A break of the October 22 high of 4.088 will trigger a long entry based on the Momentum Entry Technique (M.E.T.). The MACD indicator crossed over to bullish but the ADX is slightly on the low side at 18.66. A breakout above the recent high could see Momentum spike. The Stochastic indicator is bullish, however in “overbought” territory. The move to the upside could still be strong as the market should find little resistance based on chart data. The Trend Seeker is Up with a Strong ranking. The market price is trading above an exponential 20 day Moving Average and 50 day Moving Average. Potential stop loss orders can go on the other side of the 4.000 level.
January 2013 Soybean Oil
The January 2013 Soybean Oil contract is setting up to breakout to the upside. A break of the November 8 high of 49.57 will trigger a long entry based on the Momentum Entry Technique (M.E.T.). The MACD indicator crossed over to bullish below the baseline and the ADX is 31.63. Both of these taken together signals a great deal of potential Momentum to the upside. A double bottom was made at 46.89 (11/12/12) and 46.94 (11/16/12). If a potential risk of over $1,600 is suitable for the equity in your trading account this could be a good starting place for stop loss orders. There may be resistance at the 53.00 level which could be a first target. A longer term target could be the September 4 high of 58.69. The Trend Seeker is Down but that may change on the breakout.
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
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