For the Week of September 23, 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 by 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 135’01 (7/03/13), 134’14 (7/22/13), 133’20 (8/12/13), and 132’15 (9/18/13). 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, is bullish and below the baseline. A 20-day Exponential Moving Average is trending higher. A 50-day Moving Average is currently sideways but below Friday’s closing price. The RSI, a Momentum indicator, is above 50 (55.67). A signal there may not yet be momentum behind a potential upside move. An ideal entry, after trade confirmation, is near the trend line around 132’10. A potential stop loss can be placed below Friday’s low of 130’31. An initial target is the high of 135’01 (7/03/13).
The December 2013 Silver contract is poised for a breakout to the downside. A break of the 21.225 (9/18/13) low triggers an entry to the downside using the Momentum Entry Technique. The RSI, a Momentum indicator, is below 50 (45.36). The contract appears to have found resistance along a downward sloping trend line with touches at 25.160 (8/28/13), 24.250 (9/09/13), and 23.445 (9/19/13). Potential stop placement can go above the trend line. Potential downside targets are the low of 19.145 (8/07/13) or the twelve month contract low of 18.215 (6/28/13). The Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral but the MACD, a trend indicator, is bearish. A 20-day Exponential Moving Average is trending lower. A breakout of the 21.225 low will coincide with a break through the 50-day Moving Average.
The November 2013 Soybean contract closed on a lower trend line on Friday. A break of this trend line and Trend Seeker (a US Chart Company tool to help identify market trend) changing to Down, triggers a new short entry opportunity. The MACD, a trend indicator, is already bearish above the baseline. The contract filled in a gap made on August 26. There may still be further decline in prices as a 50% Fibonacci Retracement of the August rally is 1287’5. A potential stop loss can be placed above the high of 1361’2 (9/19/13). A potential target is the support level at 1287’5.
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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