For the Week of July 29, 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:
The September 2013 Canadian Dollar contract is set up for a breakout to the upside. The contract is trading along an upper trend line with touches at .9955 (5/09/13), .9846 (6/14/13), and .9739 (7/25/13). Friday’s trading session high (.9733) touched the trend line before backing off. A close above the upper trend line will trigger an entry to the upside. The Trend Seeker (A US Chart Company tool to help identify market trend) changed to Up on Friday, providing trade confirmation. MACD, a trend indicator, is bullish below the baseline. A 20-day Exponential Moving Average is also pointed bullish. Stochastics, a Momentum indicator, is leaning bearish and above the “over bought” territory. Though RSI, another Momentum indicator, reads 59.09, below the overbought level of 70. A potential stop loss can go below the 50-day Moving Average (.9638) and recent contract lows. A potential target is the first touch on the trend line at .9955 (5/09/13).
The September 2013 Silver contract is at the apex of a Pennant Formation. By default, the contract will breakout. I’d prefer to see a breakout to the upside through the high of 20.595 (7/23/13) using the Momentum Entry Technique (M.E.T.). The touches on the lower trend line are 18.170 (6/28/13), 19.215 (7/18/13), 19.285 (7/19/13), and 19.625 (7/26/13). The touches on the upper trend line are 22.525 (6/14/13), 20.595 (7/23/13), 20.490 (7/24/13), and 20.355 (7/26/13). MACD, a trend indicator, is bullish below the baseline. Stochastics, a Momentum indicator, has rolled over bearish below the “over bought” territory based on today’s trading activity. An M.E.T. breakout could change the course of Momentum and potentially the Trend Seeker (A US Chart Company tool to help identify market trend) which is currently Down. A potential stop loss can go below the lower trend line (19.700). There are plenty of upside targets to choose from based on a proper reward to risk ratio. There are potential resistance levels around 21.500, 22.500, and 23.500. Consider the mini-sized Silver contract which provides plenty of trading volume and open interest.
The December 2013 Soybean Meal contract is setup for a Momentum Entry Technique. A break of the 357.0 (7/08/13) low will trigger an entry to the downside. The Trend Seeker (A US Chart Company tool to help identify market trend) is currently Neutral. It should change to Down before the trade confirmation though. MACD, a trend indicator, is bearish above the baseline. A 20-day Exponential Moving Average is also pointed bearish. The 20-day Moving Average is set to cross a 50-day Moving Average as well. Stochastics, a Momentum indicator, is leaning bearish and above the “over sold” territory. A potential downside target is the low of 330.1 (4/24/13). Potential stop losses can be placed over Friday’s high of 373.4 or the high of 368.4 (7/05/13).
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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