For the Week of August 17, 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.
Let’s focus on three contracts that have defined Trend Lines Formations.
Highlighting This Week’s Potential Breakouts:
There is a potential Momentum Entry Technique (M.E.T.) setup in the September 2015 Canadian Dollar contract. An M.E.T. trade occurs on a break out of a recent pivot point high or low with a corresponding trend in that direction. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently down, but with a neutral ranking. The MACD, a trend indicator, is bullish below the baseline. The Stochastic indicator, a momentum indicator, is bearish though. After making a new twelve-month contract low at .7566 (8/05/15), this contract has been trading higher. Over the past couple session there has been a pullback setting up the pivot point. A break of the .7720 (8/12/15) high triggers the long entry opportunity if Trend Seeker confirms an uptrend.. Otherwise, the next pivot point high is .7773 (7/29/15). A stop loss could be placed below the twelve-month contract low. An upside target is the .8235 (6/18/15) high.
A Saucer Formation has developed in the Gold market. The December 2015 contract price declined to setup a new twelve-month contract low at 1073.7 (7/24/15) and is rising once again. Additionally, trading volume has been light in this contract recently, though some of that may be connected to a typical August summer trading month. A pivot point is setup at 1125.5 (8/12/15). A break of this high will trigger a long entry opportunity if the trend is up. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently down. The MACD, a trend indicator, is bullish below the baseline. The Stochastic indicator, a momentum indicator, is bullish. For trade confirmation the Trend Seeker must change to up. Also, a cross over of the 20-day and 50-day Moving Average will provide upside confirmation. A stop loss could be placed below the 1111.1 (8/14/15) low. An upside target is the 1200.0 price level.
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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