For the Week of May 06, 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 Live Cattle
The June 2013 Live Cattle contract closed below a lower trend line on Friday. There are touches on the trend line at 119.425 (4/16/13), 120.400 (4/22/13), and 121.675 (5/01/13). The Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral, with a Bearish ranking. The MACD, a trend indicator, is bearish, but below the baseline and rising. Until the Trend Seeker changes to a Downtrend, there is no entry trigger. Perhaps it will take the contract to trade through a recent low of 121.675 (5/01/13). A potential sell entry could be on a retracement to the upward sloping trend line. Potential stop losses can go above recent resistance, the high of 124.550 (4/01/13). A potential downside target is the twelve month contract low of 119.375 (4/15/13).
July 2013 Coffee
Coffee futures continues its sideways trading action since mid-March. The July 2013 contract’s Channel Formation is defined by the high of 144.50 (4/22/13) and the low of 132.70 (4/29/13). The Trend Seeker (a US Chart Company tool to help identify market trend) is Bearish, with a Weak ranking. The MACD indicator is bullish, below the baseline. Perhaps the market has finally made its low after selling off the past year. A 20-day Exponential and 50-day Simple Moving Average are converging. The same is happening with the Stochastic indicator. A close above the top of the Channel, with Trend Seeker changing to an Uptrend and other technical indicators agreeing, will trigger an entry to the upside. If the market continues selling-off, than a close below the bottom of the channel, with the technical indicators agreeing, will trigger an entry to the downside.
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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