For the Week of January 12, 2015
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 March 2015 mini Nasdaq contract setup a 1-2-3 Top Formation. This is a trend reversal formation. The #1 point is the twelve-month contract high of 4,345.25 (11/28/14). The #2 point is the low of 4,080.75 (12/16/14). The #3 point is the high of 4,322.00 (12/26/14). This high was made on a rally from the #2 point but did not surpass the twelve month contract high. Additionally, the market sold-off to 4082.00 (1/06/15) but did not break the #2 point. A break of the #2 point triggers a short entry opportunity. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is down, providing the short entry trade confirmation. The MACD, a trend indicator, agrees with Trend Seeker as it’s bearish. The Stochastic, a Momentum indicator, is bearish but relatively flat. A 20-day Moving Average just crossed over a 50-day Moving Average. That is a bearish signal. A downside target is the potential support level at 4,000.00.
The March 2015 Soybeans contract is setup in a Flat Top Triangle Formation. There are touches on the relatively flat upper trend line at 1068’2 (12/29/14), 1066’6 (12/10/14), and 1066’2 (10/30/14). There are touches on the lower trend line at 1015’4 (01/12/15), 1006’2 (1/05/15), 1007’0 (1/02/15), 932’2 (10/13/14), and 920’6 (10/01/14). A close below the lower trend line triggers a short entry opportunity. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is neutral. For trade confirmation to the downside the trend must be down. The MACD, a trend indicator is already bearish. The Stochastic, a Momentum indicator, is bearish but relatively flat. A 20-day Moving Average is nearing a cross over of a 50-day Moving Average. A cross over of these two averages is a bearish signal. A downside target is the 920’6 (10/01/14) twelve month contract low.
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