For the Week of March 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:
There is a potential short-term trading opportunity with the March 2015 British Pound contract. The contract LTD is Monday, March 16. If filled, exit the position by Friday, March 13 if the stop loss or target isn’t triggered by then. The contract recently found resistance at 1.5552 (2/26/15), which are previous contract lows from November and December. If the contract breaks below the 1.5313 (2/17/15) low, this triggers a short entry using the Momentum Entry Technique. It’s also a break below the 38.2% Fibonacci Retracement (1.5321) from the twelve-month contract low (1.4946) to the recent high (1.5552). A potential stop can be placed above that recent contract high. A potential target is the 1.5000 price level. The Trend Seeker (a U.S. Chart Company tool to help identify a markets trend) is up. For a short trade confirmation, the trend must be down. The MACD, a trend indicator, appears to be rolling over to the downside. The Stochastic indicator, a Momentum indicator, has already hooked over to the downside.
There is an upper trend line in the May 2015 Feeder Cattle contract with touches at 211.825 (1/15/15), 210.000 (1/22/15), and 201.425 (2/27/15), as well as several near touches. A close above the upper trend line will trigger a long entry. For trade confirmation though, the Trend Seeker (a U.S. Chart Company tool to help identify a markets trend) must be up. It’s currently down. The MACD, a trend indicator, is bullish below the baseline. The Stochastic indicator, a Momentum indicator, is also bullish below just above the “over sold” level. The market made a new twelve month contract low 193.900 (2/24/15), surpassing the previous low 193.950 (2/05/15) creating a Double Bottom, albeit one with not a lot of time passed in between lows. A stop loss can go below these lows or a pivot point at 197.200 (2/12/15). A potential target is a pivot point high of 225.600 (1/06/15).
The April 2015 Lean Hogs contract formed a 1-2-3 Bottom Formation. This formation is a bullish pattern. A break of the number two point triggers a long entry. The number one point is the twelve-month contract low of 63.225 (2/18/15). The market rallied to make a new short-term contract high at 69.900 (2/23/15), before pulling back. That rally setup the number two point. A number three point formed at 66.200 (2/27/15) as the pullback did not surpass the twelve-month contract low and has since been trading higher. The MACD, a trend indicator, is bullish below a baseline. Stochastics, a Momentum indicator, is slightly bullish. A 20-day Exponential Moving Average and a 50-day Moving Average are moving downward. A cross over of these averages is a bullish signal. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is down. For trade confirmation, the contract price should break through the number two point and Trend Seeker should change to up. Though this is a trend reversal pattern, the Trend Seeker may not change before the breakout.
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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