For the Week of June 16, 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:
Let’s review the Soybean complex in the middle of the U.S. planting and the Brazil harvest seasons.
The November 2014 Soybean contract continues to find major support just above the 1200’0 price level. A close below this support level will trigger an entry to the downside. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Neutral. The contract has been trading sideways as of late so this is of no surprise. The MACD, a trend indicator, is flat below the baseline signaling an upcoming bearish trend. A 20-day Exponential Moving Average has crossed over a 50-day Moving Average, this is a bearish signal. The Stochastic indicator, a Momentum indicator, signals a contract that is bullish though. Both the Trend Seeker and Momentum must be bearish before entering a short position for trade confirmation. Risk just about 30’0 by placing a stop loss above the 6/10/14 pivot point high. A potential downside target is the 1100’0 price level.
The December 2014 Soybean Meal contract is trading along a lower trend line. There are touches at 338.5 (1/30/14), 343.4 (2/11/14), 388.0 (6/05/14), and 388.8 (6/06/14). A close below the lower trend line will trigger an entry to the downside based on the Trend Line Formation Breakout. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Up. The MACD, a trend indicator, is bearish above the baseline. A 20-day Exponential Moving Average has hooked bearish and approaching a 50-day Moving Average. The cross over is a bearish signal. The Stochastic indicator, a Momentum indicator, signals a contract that bearish. Once again, the Trend Seeker must line up Down before trade confirmation. The downside target is the support level near the 350.0 price level.
The December 2014 Soybean Oil contract triggered a M.E.T. entry to the upside on Friday on the break out through the 39.70 (6/09/14) high. However, the Trend Seeker (a U.S. Chart Company tool to help identify market trend) is still Down so no trade confirmation. The MACD, a trend indicator, is bullish below the baseline. A 20-day Exponential Moving Average is in the process of hooking bullish and heading towards a 50-day Moving Average. A cross over is a bullish signal. The Stochastic indicator, a Momentum indicator, is strong to the upside. With the technical indicators signaling a bullish market perhaps a break of the 40.00 price level will also see a change in the Trend Seeker.
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