For the Week of November 18, 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 January 2014 Natural Gas contract has formed two parts of a three part 1-2-3 Bottom Formation. Establishing the number three point, then breakout of the number two point will trigger a long entry. The number one point of the formation is the twelve-month contract low of 3.465 (11/05/13). The contract has since rallied as high as 3.713 (11/15/13), the current number two point of the formation. If the market proceeds to sell-off, but not below the twelve-month contract low, a number three point is established. A 1-2-3 Bottom Formation is a trend reversal formation. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Down with a Weak ranking. MACD, a trend indicator, is already bullish below the baseline. A 38.2% Fibonacci Retracement (3.705) and recent highs may act as strong resistance. Therefore, a breakout, with an increase in Momentum, may contribute to the continuation of a rally. Stochastics, a Momentum indicator, is currently bullish below the “over sold” level. RSI, another Momentum indicator, is just below the 50.00 level at 47.17. However, as the number three point must first establish before a trade trigger confirmation, these indicators are likely to change. A potential stop loss will be determined if/when a number three point is established. A potential upside target is the high of 4.125 (9/19/13).
The January 2014 Heating Oil contract has the potential to break out to the upside. A close above a downward sloping trend line, a break of the 2.9882 (10/31/13) high, and the crossover of a 20-day and 50-day Moving Averages, would all together trigger a long entry. There are touches on the trend line at 3.2001 (8/29/13), 3.0560 (10/16/13), and 3.0422 (10/22/13). The top point of the trend line of 3.2001 would be the potential upside target. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Down with a Weak ranking. MACD, a trend indicator, is already bullish below the baseline. Stochastics, a Momentum indicator, is currently bullish below the “over sold” level.
The January 2014 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 2.7003 (10/16/13) will trigger an entry to the upside. The contract broke through the last the M.E.T. trigger point (2.6316), but the Trend Seeker (A US Chart Company tool to help identify market trend) was Neutral. Therefore there was no long entry trigger. The Trend Seeker must change to Up for a trigger confirmation. The MACD, a trend indicator, is already bullish below the baseline. Stochastics, a Momentum indicator, is just the “over sold” territory, perhaps being oversold was one reason behind the retracement during Friday’ session. A 20-day Exponential Moving Average is pointed upward below the current market price. A crossover with the 50-day Moving Average is also a bullish signal. A potential upside target is the 2.8726 (8/26/13) twelve-month contract high.
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.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.
TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.