For the Week of September 12, 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:
Australian Dollar
There is a potential Momentum Entry Technique (M.E.T.) setup in the December 2016 Australian Dollar futures contract. An M.E.T. signal 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, though with a Bearish ranking. Perhaps on the breakout the Trend Seeker will change to Down. The MACD, a trend indicator, however is bearish above the baseline. The Stochastic indicator, a momentum indicator, is bearish as well with increasing downward Momentum. A 20-day Moving Average is approaching a 50-day Moving Average, a cross over of these Moving Averages confirms the sell signal. A break of the .7472 low (8/31/16) triggers that sell entry. A stop loss will be placed above recent session highs such as the .7561 high (8/29/16). The downside target is .7121 low (5/24/16).
Corn
The December Corn futures contract continues to find major resistance near the 345’0 price level. Since late July when the contract broke to a new twelve-month low, the contract has tested 345’0 at least ten trading sessions to no avail. With contract prices near this level once again look for an opportunity to sell the futures contract. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently Down. There is some divergence with the MACD indicator, a trend indicator. The Stochastic indicator, a momentum indicator, is bullish as well, though near the top of the top of the range or “over bought” level. A 20-day Moving Average is approaching a 50-day Moving Average, a cross over of these Moving Averages confirms a sell signal. A break of the .332’4 low (9/08/16) and 20-day Moving Average (332’7) triggers that sell entry. A stop loss will be placed above the resistance level of 345’0. The downside target is the twelve-month contract low of 315’4(8/31/16).
Soybean Oil
There is a potential Momentum Entry Technique (M.E.T.) setup in the December 2016 Soybean Oil futures contract. An M.E.T. signal 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 Up though. The MACD, a trend indicator, disagrees with Trend Seeker as it’s strongly bearish. The Stochastic indicator, a momentum indicator, is bearish as well. A break of the .3231 low (9/01/16) triggers a sell entry. This is also the 50% Fibonacci Retracement of the August rally. As well as a break of the 200-day Moving Average (32.33). The downside target is the twelve-month contract low of 29.85 (7/29/16) when the contract started the nearly 500 point rally.
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