For the Week of December 16, 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 March 2014 Dollar Index contract is setup for a trade opportunity to the downside. A break of the 79.875 low (12/11/13) will trigger a short entry based on the Momentum Entry Technique. 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. The Stochastic, a Momentum indicator, is bearish, just above the “over sold” level. RSI, another Momentum indicator, has turned sharply to the downside. Friday’s trading session high, 80.570, traded short of a 20-day Exponential Moving Average (80.559) and a 50-day Moving Average (80.593). This resistance level may be used for stop loss placement. A downside target is the market breaking through the twelve month contract low of 79.355 (10/25/13) and continuing to the downside.
The March 2014 Silver contract is setup for a trade opportunity to the upside. A break of the 20.480 high (12/11/13) will trigger a long entry based on the Momentum Entry Technique. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down though. The Trend Seeker must change to Up before an upside trigger confirmation. The MACD, a trend indicator, is bullish and below the baseline. The Stochastic, a Momentum indicator, is bearish. The RSI, another Momentum indicator, is below the 50.00 level but has recently turned bullish. The contract price is currently below the 20-day Exponential Moving Average (20.030). A potential stop loss is the low of 18.890 (12/04/13). Potential upside targets are the highs of 23.115 (10/30/13), 23.400 (9/19/13), and 25.080 (8/28/13).
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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