For the Week of August 25, 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 October 2014 Unleaded Gasoline futures contract has been in a downtrend for the past 34 days. Along the way, an upper trend line has been formed with touches at 2.8969 (6/23/14), 2.8848 (6/25/14), 2.8736 (6/27/14), 2.7085 (7/30/14), 2.6634 (8/08/14), 2.6075 (8/21/14), and 2.6046 (8/22/14). On 8/18/14, the market tested a previous support level at 2.5186 and has since rallied. Two indicators have turned bullish. The MACD, a trend indicator, is bullish below the baseline. The Stochastic, a Momentum indicator, is bullish above the “over sold” level. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down. Watching for a long entry opportunity. For trade confirmation to the upside, the Trend Seeker must be Up. Perhaps this will occur on a break of a 20-day Exponential Moving Average (2.6120) and a recent high at 2.6293 (8/13/14). Upside objective is 2.7678 (5/27/14).
Kansas City Wheat
The December 2014 Kansas City Wheat contract has been trading sideways for the better part of the July and August months. The market set a new twelve-month contract low on 8/14/14 at 617’6, surpassing the previous contract low of 622’0 (1/29/14). However, the market has since been trading at higher prices. Two indicators have turned bullish as well. The MACD, a trend indicator, is bullish below the baseline. The Stochastic, a Momentum indicator, is bullish above the “over sold” level. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down. Watching for a long entry opportunity. For trade confirmation to the upside, the Trend Seeker must be Up. Perhaps this will occur on a break of a pivot point high at 674’2 (8/06/14). Before this price level trades a 20-day Exponential Moving Average may cross over a 50-day Moving Average – this is a bullish signal.
The December 2014 Cocoa contract has setup two points of a 1-2-3 Top Formation. The #1 point is the twelve-month contract high of 3269 (8/18/14). The #2 point is the recent low of 3184 (8/22/14). The market will need to continue it’s rally but not surpass the #1 point to create a #3 point. If that occurs a roll over and break of the #2 point will trigger a short entry opportunity. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Up. For trade confirmation to the downside, the Trend Seeker must be Down. The MACD, a trend indicator, is bearish above the baseline. The Stochastic, a Momentum indicator, is currently bullish however. A downside target is the 3045 (6/24/14) support level.
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