For the Week of January 13, 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:
Let’s take a look at the Softs market sector.
The May 2014 Coffee contract is setup for a trade opportunity to the upside. A break of the 124.65 (1/07/14) recent contract high is an M.E.T. breakout. M.E.T. is the Momentum Entry Technique. The Stochastic and RSI, both Momentum indicators, are bullish. Though both are currently relatively flat as the May 2014 futures contract is trading sideways. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Up with a Strong ranking. The futures contract is trading above both a 20-day Exponential Moving Average and 50-day Moving Average. A potential stop loss can be placed below recent contract lows near 117.90 (1/06/14). An upside target is a potential resistance level near the mid-summer 2013 highs.
The May 2014 Cocoa contract is setup for a trade opportunity to the downside. A close below a lower trend line will trigger a short entry based on the Trend Line Formation. There are touches on the lower trend line at 2633 (1/03/14) and 2676 (1/10/14). There is resistance to the upside above the recent contract session highs near 2723. A stop loss can be placed above these contract highs. The downside target is the 2415 (8/30/13) low. There appears to be potential support at this level. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down with a Weak ranking. The MACD, a trend indicator, agrees as its bearish below the baseline.
The March 2014 OJ contract is set up for a breakout to the upside. A close above the twelve-month contract high of 151.85 (6/11/13) 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 an Extreme ranking. The market traded above the contract high during Friday’s trading session to 152.40, but the contract closed below at 148.10. For trade confirmation to the upside using a Hi-Lo Breakout Formation, the contract must close above the twelve-month contract high. The MACD, a trend indicator, is bullish above the baseline. Stochastics, a Momentum indicator, is in “over bought” territory but still bullish. A potential stop loss can be placed below the 50% retracement of Friday’s trading session (147.40) and the 12/13/13 session high (147.15). A potential target,163.65, is determined by using the Wave Projection Price.
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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