For the Week of November 11, 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 in a 1-2-3 Top Formation. The twelve-month contract high, and number one point of the formation, is 1.6252 (10/01/13). The contract traded lower to 1.5886 (10/16/13), setting up the number two point of the formation. From there the contract rallied to setup the number three point of the formation at 1.6250 (10/23/13). That session high did not surpass the twelve-month contract high, setting up a Double Top Formation (a bearish formation) as well in the process. The contract also failed to take out the number two point on the recent sell-off. The session low was 1.5897 (11/04/13). The Trend Seeker (A US Chart Company tool to help identify market trend) is currently Neutral, but with a Bearish ranking. The 1-2-3 Top Formation is a trend reversal formation, so the Trend Seeker may only change if a breakout and continuation occurs. The MACD, a trend indicator, crossed over bearish above the baseline. Stochastics, a Momentum indicator, is above the “over sold” territory. The 50% Fibonacci Retracement of the September rally is 1.5836, this level may act as support. One potential target is the low of 1.5420 (8/28/13), the beginning of the September rally.
The December 2013 Unleaded Gasoline contract is setup for a breakout to the upside through a Momentum Entry Technique (M.E.T.). A break through the session high of 2.6306 (10/30/13) will trigger an entry to the upside. The contract may have found support on a lower trend line with touches at 2.6380 (8/08/13), 2.5588 (10/01/13), and 2.4945 (11/07/13). The last low of the trend line is a support level dating back to last November as well. The Trend Seeker (A US Chart Company tool to help identify market trend) is currently Down, but with a Weak ranking. The MACD, a trend indicator, is about to cross over bullish below the baseline. Stochastics, a Momentum indicator, is above the “over sold” territory. A 20-day Exponential Moving Average is pointed upward above the current market price. If the contract breaks out it will be trading above this Moving Average.
The January 2014 Feeder Cattle contract is setup for a breakout to the downside through the Momentum Entry Technique (M.E.T.). A break below the 163.200 (11/04/13) low will trigger a short entry. The Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral, but with a Bearish 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 (165.217) is angling downward. A 50-day Moving Average (163.735) is angling upward. A crossover of these Moving Averages is a bearish signal. A break below this 50-day 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).
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