For the Week of December 09, 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 RBOB contract is setup for a trade to the upside. The contract has potentially found support along a lower trend line. There are touches at 2.4922 (11/07/13), 2.4995 (11/08/13), 2.6586 (12/02/13), and 2.6967 (12/05/13). There is also support at a 20-day Exponential Moving Average of 2.6734 and a 50-day Moving Average of 2.6270. The resistance to upside are the highs of 2.7436 (9/13/13), 2.7450 (11/22/13), 2.7496 (12/04/13), 2.7490 (12/05/13), and 2.7545 (12/06/13). A break of the highest high of 2.7545, will trigger an entry to the upside based on the Momentum Entry Technique. On the conservative side, wait for a close above the recent highs. The Trend Seeker (a U.S. Chart Company tool to help identify market trend is Up. The MACD, a trend indicator, agrees, as its bullish but above the baseline. Stochastics, a Momentum indicator, exhibits a market that is potentially rolling over to the downside. The same goes for RSI, the Relative Strength Index. A pull back to the support levels could setup a long entry trade with less risk though.
Kansas City Wheat
The Kansas City Wheat market is mirroring this past summers trading activity. This summer, the market traded sideways, spiked up, retraced, and once again traded sideways briefly. Back on September 25, the market broke out above recent highs and rallied for 70 cents. Now, a break of the recent highs around 716’0 may trigger the same type of rally. Currently the Trend Seeker (a U.S. Chart Company tool to help identify market trend is Down. The MACD, a trend indicator, agrees as it’s bearish but above the baseline. This all lines up with March 2014 contract making a new twelve month contract low at 693’2 (12/06/13). Stochastics, a Momentum indicator, exhibits a market that is potentially “over sold.” The 20-day Exponential Moving Average is pointed down but the 50-day Moving Average is flat, both are above the current market price.
The March 2014 Oats contract is setup for a trade to the upside. The contract is trading along a lower support line. There are touches at 308’4 (11/08/13) and 324’0 (12/05/13). There is also support with a 20-day Exponential Moving Average of 325’2. A break of the 338’0 (11/26/13) high will trigger an entry to the upside based on the Momentum Entry Technique. The Trend Seeker (a U.S. Chart Company tool to help identify market trend is Up. The MACD, a trend indicator, agrees as its bullish but above the baseline. Stochastics, a Momentum indicator, is bullish. The same goes for RSI, the Relative Strength Index. A potential stop loss can be placed below the pivot point low of 324’0 (12/05/13). A potential upside target is the 359’0 (8/27/13) high; the next target is the 394’2 (6/19/13) high.
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