For the Week of July 11, 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 September 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 Up. The MACD, a trend indicator, is bullish above the baseline, however there is divergence. The Stochastic indicator, a momentum indicator, is bullish as well, though perhaps over bought. A 20-day Moving Average crossed a 50-day Moving Average, a bullish signal A break of the 96.865 (6/27/16) high triggers an entry to the upside. A stop loss could be placed below the pivot point of 95.375 (7/05/16). Upside targets are the 98.500 level and the 100.000 level, potential resistance levels.
There is a potential Momentum Entry Technique (M.E.T.) trade setup in the November 2016 Soybeans 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 Neutral. For short entry confirmation the Trend Seeker must change to a Down trend. The MACD, a trend indicator, is bearish above the baseline. The Stochastic indicator, a momentum indicator, is bearish as well. A 20-day Moving Average has hooked towards the 50-day Moving Average, a bearish signal on a cross over. A break of the 1021’0 (7/08/16) low, or even the 1018’6 (5/24/16) low, triggers an entry to the downside with the other criteria in place. A stop loss could be placed above the 50-day Moving Average (1080’0) and recent contract highs. The downside target is the 900’0, a level of potential support and near where prices were trading last year this time and into the later summer months.
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