For the Week of February 19, 2013
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:
March 2013 Australian Dollar
The March 2013 Australian Dollar contract may have found resistance along an upper trend line. There are touches at 1.0535 (1/22/13), 1.0524 (1/23/13), 1.0509 (1/24/13), 1.0435 (2/05/13), and Friday’s high of 1.0353. The MACD indicator signals a bearish market going back to the first point of the trend line. The Trend Seeker (a US Chart Company tool to help identify market trend) agrees, it states the market’s trend is Down. A break below the low of 1.0200 (2/12/13) will trigger a short entry based on the Momentum Entry Technique. The last time this contract broke recent lows (2/06/13) it traded down to a previous support level, a congestion level around 1.0200 from mid-July to mid-November. If the contract trades through this support level it may sell-off to the 1.0000 level. The Stochastic indicator displays a bearish market above the “over sold” territory. Momentum is strong with an ADX reading of 28.04. This reading is well above a typical 20.00 confirmation number. A potential stop loss could go above the upper trend line.
March 2013 Ten Year Note
The March 2013 Ten Year Note contract is trading below a Trend Line as well. There are just two touches at this time, at 134’01.0 (12/06/12) and 132’17.5 (1/24/13). The high from December 28, 2012 fails to touch the trend line. Friday’s high of 131’23.5 also fails to touch the trend line. The market appears to have found support around the 131’00.0 price level. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Down. Still watching for a breakout and close above the upper trend line and Trend Seeker flipping to Up. Meeting these criteria, along with confirmation from other technical indicators, will trigger a long entry. The MACD indicator is bullish and below the baseline. The Stochastic indictor lines are choppy but currently bullish.
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.
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