For the Week of November 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:
Let’s review the three major grain markets after today’s USDA Supply/Demand and Crop Production reports were released:
Already long one contract per the Trade Spotlight advisory, there is another entry opportunity using the Momentum Entry Technique (M.E.T.) A break of the 371’4 high (10/30/14) in the December 2014 Corn contract triggers a long entry. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is up. In accordance, the MACD indicator is bullish, but waning. Similarly can be said about Momentum, as the Stochastic indicator is flat. The contract appears to found support along a lower trend line with touches at 318’2 (10/01/14), 319’2 (10/02/14), 321’0 (10/03/14), 330’4 (10/13/14), 348’4 (10/27/14), and 359’0 (11/05/14). A 20-day Exponential Moving Average is bullish, previously crossed over a 50-day Simple Moving Average. A stop loss may be placed below this trend line. An upside target is the 435’0 low (1/10/14).
After pulling back to a support level, there is an entry opportunity in the Chicago Wheat market using the Momentum Entry Technique (M.E.T.). A break of the 545’4 high (10/30/14) in the December 2014 Chicago Wheat contract triggers a long entry. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is up. MACD, a trend indicator, tells a different story of a bearish contract. The contract is trading near support with lows at 511’0 (11/07/14), 510’4 (10/27/14), and 512’2 (10/21/14). If this support level holds it’s possible for the MACD to shift bullish. A 20-day Exponential Moving Average is slightly bearish but already crossed over a 50-day Simple Moving Average.A stop loss may be placed below these lows. An upside target is a previous short-term contract high at 579’2.
The January 2015 Soybean contract is in an uptrend according to Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) but watching this market for a trade opportunity to the downside. MACD, a trend indicator, agrees with Trend Seeker. Both must be down for short entry trade confirmation. A close below a lower trend line will trigger the short trade opportunity with the additional confirmation. The touches on the lower trend line are at 923’6 (10/13/14), 943’4 (10/20/14), 963’0 (10/23/14), 973’2 (10/27/14), and 995’2 (11/05/14). Stochastics, a Momentum indicator, is near the “over bought” level. Both a 20-day Exponential and a 50-day Simple Moving Averages are flat. A cross-over is a bearish indicator. A potential stop loss may be placed above two recent highs at 1059’2. A downside target is the twelve-month contract low at 912’2.
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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