For the Week of April 28, 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 Euro FX contract established a 1-2-3 Top Formation. The number one point is the twelve-month contract high of 1.3966 (3/13/14). The number two point is the 4/04/14 low of 1.3669. The contract rallied to 1.3903 (4/11/14), this sets up the number three point of the formation. A break through the number two point triggers an entry to the downside. An aggressive short entry, using the Momentum Entry Technique, is a break of the 1.3787 low (4/15/14). The MACD, a trend indicator, is above the baseline and slightly bullish. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently neutral, with a bullish ranking. A 1-2-3 Formation is a trend reversal formation though. Stochastics, a Momentum indicator, is to the downside well above the “over sold” territory. A 20-day Exponential Moving Average and 50-day Moving Average are converging. A crossover of these Moving Averages, which could occur above the number two point, is a bearish indicator. A downside target is the 1.3482 low (1/31/14). A potential stop loss is the 1.3864 (4/17/14) high.
The July 2014 Crude Oil contract setup a Trend Line Formation. A close below the lower trend line triggers a short entry. The touches on the trend line are the lows of 90.9 (1/13/14), 90.62 (1/14/14), 95.73 (3/17/14), 95.94 (3/18/14), and 97.30 (4/02/14). The MACD, a trend indicator, is bearish and above the baseline. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently up, with a weak ranking. For trade confirmation, the Trend Seeker must be down. Stochastics, a Momentum indicator, is strong to the downside above the “over sold” territory. A 20-day Exponential Moving Average and 50-day Moving Average are converging. A crossover of these Moving Averages, which could occur above the number two point, is a bearish indicator. A downside target is the 95.73 low (3/17/14). A longer term target is this year’s contract low of 90.40 (1/09/14) A potential stop loss will be determined upon trade confirmation.
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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