For the Week of March 11, 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:
June 2013 Euro Currency
Rolling out to the June 2013 contract, the Euro Currency market has found resistance along an upper trend line. There are touches 1.3731 (2/01/13), 1.3530 (2/13/13), 1.3444 (2/20/13), and Friday’s high of 1.3143. The Trend Seeker (a US Chart Company tool to help identify market trend) states the market’s trend is Down, with a Weak ranking. Instead of looking for an opportunity to the downside, I am looking for a breakout to the upside. A close above the trend line and Trend Seeker flipping to an Uptrend will trigger a long entry. There appears to be support along recent lows. Going back to last Fall there was a lot of choppiness around that 1.2900 level. This may act as support and potential spot for stop losses. The upside target will be the twelve month contract high of 1.3731 (2/01/13). The MACD and Stochastic Indicators are both bearish, agreeing with the current Trend. Once again, the trend must reverse for confirmation of a potential long entry.
May 2013 Unleaded Gasoline
The May 2013 Unleaded Gasoline contract formed two points of a 1-2-3 Formation. The number one point of the formation is the twelve month contract high of 3.3037 (2/19/13). The market sold-off to make a new short-term low at 3.0315 (3/01/13). This low sets up the number two point of the formation. The market is currently rallying. As long as the twelve month high (and number one point) is not surpassed and then the market sells-off, a number three point will be created. Once the formation is established, a break below the number two point will trigger a short entry. This is a trend reversal formation. Currently the trend, according to the Trend Seeker, is Neutral with a Neutral ranking. The ranking, and possibly the trend, may change bullish after Friday’s rally. But again, the formation is not established yet. Friday’s high of 3.1858 could potentially setup the number three point as long as the market then sells-off.
May 2013 Soybeans
The May 2013 Soybean contract appears to be in the Accumulation Cycle. This period is the result of sideways trading in a market. Since October 2012 the contract has traded between 1499’2 (11/01/13) and 1337’6 (11/16/12). Recently, the contract has been making higher lowers setting up a lower trend line with touches at 1372’4 (1/11/13), 1393’4 (2/13/12), and 1395’0 (2/14/13). Ideally there will be another touch on the lower trend line before the market breakouts out to the upside. The lower trend line would then act as a support level, a place for potential stop losses. A close above the resistance level (1499’2) will trigger a long entry. The potential upside target is the twelve month contract high of 1639’4 (9/14/12). The Trend Seeker (a US Chart Company tool to help identify market trend) states the market’s trend is Up, with an Extreme ranking. MACD agrees with the bullish sentiment. The Stochastic indicator has crossed over to bearish. Both indicators are rather Neutral which is not surprising for a sideways trading market. Volume in the market has been increasing lately, a sign the market is readying to break out.
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