For the Week of January 04, 2016
This weekly feature examines chart formations, along with technical indicators, of two to three commodity markets. Breakouts of these formations may lead to trading recommendations published by the Trade Spotlight advisory service.
Highlighting This Week’s Potential Breakouts:
U.S. Dollar Index
There is a potential Momentum Entry Technique (M.E.T.) trade setup in the March 2016 U.S. Dollar Index contract. An M.E.T. trade occurs on a break out of a recent pivot point high or low with the corresponding trend in the same direction. 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 however. The Stochastic indicator, a momentum indicator, is bullish as well. The contract has found support on a lower trend line with touches at 97.225 (12/15/15), 97.835 (12/28/15), 97.840 (12/29/15), and 98.110 (1/04/16). A break of the 99.345 (12/17/15) high triggers an entry to the upside if the Trend Seeker confirms the uptrend. A stop loss could be placed below the lower trend line. An upside target is the twelve month contract high of 100.70 (12/03/15).
There is a potential trade on a break out of a Trend Line in the April 2016 Gold contract. There are touches on the trend line at 1097.5 (11/16/15), 1088.8 (12/04/15), and 1081.5 (12/21/15). 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 slightly bullish below the baseline however. The Stochastic indicator, a momentum indicator, is bullish as well. For trade confirmation, the Trend Seeker should be up. A 20-day Moving Average is converging on a 50-day Moving Average. A cross over of these two averages is a bullish indicator. A stop loss can be placed below the 1058.1 (12/31/15) pivot point low. An upside target is just below the 1200.0 price level at the 1191.9 (10/15/15) high.
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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