For the Week of June 23, 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 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), and 386.9 (6/18/14). A close below the lower trend line will trigger an entry to the downside based on the Trend Line Breakout Formation. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is up. The Trend Seeker flipped to up from neutral after a strong trading session on Friday. The MACD, a trend indicator, is bearish above the baseline though. A 20-day Exponential Moving Average is closing in on crossing over a 50-day Moving Average. That is a bearish signal. The Stochastic indicator, a Momentum indicator, is strong to the downside. Both the Trend Seeker and Momentum should be bearish before entering a short position. If both line up, a break of the 386.9 (6/18/14) low would trigger an entry to the downside. Place an initial stop loss above the 402.9 (6/10/14) picot point high.
The September 2014 Rough Rice contract has setup a Hi-Lo Breakout Formation. A close below the twelve-month contract low of 1374.0 (6/10/14) triggers an entry opportunity order to the downside. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is down. However, the MACD, a trend indicator, is bearish, appears to have bottomed out. The Stochastic indicator, a Momentum indicator, is in the “over sold” territory. I’d like to see the twelve-month contract hold and watch for an opportunity to the upside. A 1-2-3 Bottom Formation would be in place. The number one point is the twelve-month contract low. The number two point is the high of 1428.0 (6/16/14). The number three point, to date, is the low of 1375.0 (6/20/14). The Trend Seeker and technical indicators must be bullish for trade confirmation to the upside but there is plenty of room on the chart to allow this to occur.
The September 2014 Coffee contract is trading along an upper trend line. There are three touches at 220.60 (4/23/14), 209.45 (5/07/14), 178.85 (6/20/14), and numerous near touches. A close above the upper trend line will trigger a long entry opportunity. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently Down. However, the MACD, a trend indicator, is bullish below the baseline. A 20-day Exponential Moving Average has hooked up. The Stochastic indicator, a Momentum indicator, is strong to the upside as well. Stop loss orders will be determined upon potential entry.
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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