For the Week of March 10, 2014
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 June 2014 British Pound contract established a 1-2-3 Top Formation. The number one point is the twelve-month contract high of 1.6805 (2/18/14). The number two point is the 2/24 low of 1.6570. The contract rallied to 1.6773 (3/07/14), this sets up the number three point of the formation, as the number one point was not surpassed. A break through the number two point triggers an entry to the downside. The MACD, a trend indicator, is bearish above the baseline. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently up, with a weak ranking. A 1-2-3 Formation is a trend reversal formation though. Stochastics, a Momentum indicator, is strong to the downside above the “over sold” territory. A 20-day Exponential Moving Average is bearish and 50-day Moving Average is bullish. A crossover of these Moving Averages, which could occur near the number two point price level, is a bearish indicator. A downside target is the 1.6239 low (2/05/14). A potential stop loss can be placed above the twelve-month contract high.
The May 2014 Cocoa contract is setting up a Flat Top Triangle Formation. There is currently just one touch on the upper trend line, the twelve-month contract high of 3.002 (2/21/14). However, there is resistance with plenty of trading session highs near the 3000 price level going back to the end of January. There are two touches on the lower trend line at 2670 (1/22/14) and 2901 (3/03/14). The MACD, a trend indicator, is bearish above the baseline. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently up, with a strong ranking. Stochastics, a Momentum indicator, is bullish, below the “over bought” territory . A 20-day Exponential Moving Average is flat and the 50-day Moving Average is bullish. A potential upside target of 3190 is calculated using a Wave Projection Price.
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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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