For the Week of October 28, 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 December 2013 British Pound contract is set up for a breakout to the upside. A close above the twelve month contract high of 1.6252 (10/01/13) will trigger a long entry based on a Hi-Lo Breakout formation. The Trend Seeker (A US Chart Company tool to help identify market trend) is Up with a Weak ranking. Along with the Trend Seeker ranking, various technical indicators reveal a market potentially ready to head lower in price. The MACD, a trend indicator, crossed over bearish above the baseline. Stochastics, a Momentum indicator, is in “over bought” territory. If prices head lower and the Trend Seeker changes to a Down trend, a 1-2-3 Formation is set up to trade this market to the downside. The breakout point of the 1-2-3 Formation is the low of 1.5886 (10/16/13), this is also a trend line breakout. The two other points of the 1-2-3 Formation are the high of 1.6252 (10/01/13, the number one point) and 1.6250 (10/23/13, the number three point).
The December 2013 Natural Gas contract is range bound within a Channel formation. There are touches to the upside near 4.036 (7/10/13), 4.061 (7/18/13), and 4.041 (9/19/13). There are touches to the downside near 3.629 (9/26/13), 3.648 (10/03/13), and 3.660 (10/24/13). The Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral. The MACD, a trend indicator, is also neutral. The 20-day and 50-day Moving Averages are relatively flat. The Stochastic indicator, a Momentum indicator, is near the “over sold” territory. This contract is setup for “writing” options, both calls and puts, to collect premium. December options have 28 days until expiration, January options have 59 days until option expiration. It would be best to be above 4.251 (6/19/13) and below 3.469 (8/08/13).
The January 2014 Feeder Cattle contract made a new twelve month high at 169.425 (10/11/13) and since has been trading sideways. The lows around 165.725 (10/22/13) have setup a support level. A break and close below this level will trigger an entry to the downside. The Trend Seeker (a US Chart Company tool to help identify market trend) is Up, but with a Weak ranking. The MACD, a trend indicator, has crossed over to bearish already. Stochastics, a Momentum indicator, is above the “over sold” territory. A 20-day Exponential Moving Average (166.088) is angling downward. A break below this Moving Average coincides with the break of the support level. A longer-term potential downside target is the low of 155.625 (8/26/13).
This material is conveyed as a solicitation for entering into a derivatives transaction.
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