For the Week of February 02, 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:
Let’s review three contracts that are setup in a Hi-Lo Breakout Formation. This formation seeks to trade opportunities with price momentum in a prevailing trend. For more information on this trading formation visit: http://www.gbemembers.com/education/hilo.php
30-Year Treasury Bonds
The March 2015 30-Year Treasury Bonds twelve-month contract high was established Friday at 151’28. A close above the high triggers a long entry based on the Hi-Lo Breakout Formation. Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Up with a Strong ranking. The MACD, a trend indicator, signals a contract that has strong, but waning upside movement. The Stochastic indicator, a momentum indicator, signals a contract that has upward momentum but might be “overbought.” A 20-day and 50-day Moving Average are widening, this is a bullish signal. An upside target is a Wave Projection Price of 154’09. A potential stop loss can be placed below several recent contract lows with the 149’10 being the lowest, albeit with more risk.
Kansas City Wheat
The March 2015 Kansas City Wheat twelve-month contract low was established on 1/29/15 at 533’2. A close below the low triggers a shorty entry based on the Hi-Lo Breakout Formation. Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down with a Weak ranking. The MACD, a trend indicator, signals a contract that has strong and continuing downside movement. The Stochastic indicator, a momentum indicator, signals a contract that has downward momentum but might be “oversold.” A 20-day and 50-day Moving Average already crossed over in mid-January, a bearish signal. A downside target is the 500’0 price level. A potential stop loss can be placed above the 549’4 (1/30/15) high.
The May 2015 Sugar twelve-month contract low was established on 1/05/15 at 14.45. A close below the low triggers a shorty entry based on the Hi-Lo Breakout Formation. Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down with a Weak ranking. The MACD, a trend indicator, just crossed over last week signaling the start of a potential down trend. The Stochastic indicator, a momentum indicator, is above the baseline and signals a contract that has further downward momentum. A 20-day and 50-day Moving Average are converging and nearing a cross over, a bearish signal. Reviewing a monthly chart, prices haven’t been this low in this market since 2009. There appears to be support near the 10.00 price level. This can be a downside target. A potential stop loss can be placed above Friday’s high of 15.24.
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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