For the Week of September 16, 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:
30-Year Treasury Bonds
The December 2013 30-Year Treasury Bonds contract is poised for a breakout to the upside. A Double Bottom Formation has formed with the lows of 128’13 (8/22/13) and 128’12 (9/06/13). The contract is trading along a downward sloping trend line with touches at 140’25 (6/06/13), 139’20 (6/14/13), 133’20 (8/12/13), 132’04 (8/28/13), and 131’30 (8/30/13). A close above the trend line and the Trend Seeker (a US Chart Company tool to help identify market trend) changing to Up, will trigger a new long entry opportunity. The MACD, a trend indicator, appears to be bullish already below the baseline. A 20-day Exponential Moving Average is pointed up. A 50-day Moving Average is currently sideways. The Relative Strength Index, a Momentum indicator, is above the 50.00 level, perhaps signaling upcoming momentum to the upside. A potential stop loss can be placed below the double bottom lows of 128’12. An initial target is the high of 135’01 (7/03/13).
Natural Gas
The November 2013 Natural Gas contract formed a 1-2-3 Bottom Formation. The number one point is the twelve month contract low of 3.281 (8/08/13). The number two point of 3.801 (9/05/13) was setup on an August rally. The contract retraced to 3.603 (9/11/13), the Fibonacci Retracement of 38.2%. This low sets up the number three point of the formation. A break through the number two point triggers an entry to the upside. The MACD, a trend indicator, is bullish just above the baseline. Stochastics, a Momentum indicator, is bullish and below the “over bought” level. The market is above a 20-day Exponential Moving Average and 50-day Moving Average, but rather flat. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Up. A potential stop loss is the number three point of 3.603 (9/11/13).
Chicago Wheat
The December 2013 Chicago Wheat contract formed a Flat Bottom Triangle Formation, trading in between a downward sloping trend line and lower support level. There are touches at 902’0 (11/29/13), 892’4 (12/07/13), 730’6 (6/19/13), 676’4 (8/26/13). A break above the trend line will trigger an entry to the upside. However, for trade confirmation, Trend Seeker (a US Chart Company tool to help identify market trend) must change to Up from its current Down trend. That trigger may first take a break through the 50-day Moving Average (660’1). The MACD, a trend indicator, is flat below the baseline. Stochastics, a Momentum indicator, is also flat near the “over sold” level though. A potential stop loss is the twelve month contract low of 635’4 (8/14/13). A potential upside target is the resistance level at 758’2 (5/03/13).
Risk Disclosure
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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