For the Week of October 17, 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:
The December 2016 Soybean Meal futures contract is range bound within a Flat Bottom Triangle Formation. There are touches on the upper trend line at 349.3 (7/29/16), 338.5 (8/16/16), 309.0 (10/07/16), 306.5 (10/12/16), and 306.0 (10/14/16). The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently Down with a Neutral ranking. The MACD indicator, a trend indicator, is relatively flat but showing signs of turning bullish. A close above the upper trend line and a change in Trend Seeker triggers an entry to the upside. The Stochastics indicator, a Momentum indicator, is bullish. The trading volume has retreated the last four trading days, but an influx of long contracts would make for stronger Momentum. The 20-day and 50-day Moving Averages are converging. A cross-over of these averages is a bullish signal as well. Initial stop loss would be placed below the 300.0 price level and twelve-month contract low of 294.1 (9/27/16). Upside target is near the 350.0 price level.
Kansas City Wheat
There is a potential Channel Formation breakout setup in the December 2016 Kansas City Wheat futures contract. The contract is range bound between the twelve-month contract low of 397’4 (8/31/16) and 425’6 (9/23/16). The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently Down with a Weak ranking. The MACD, a trend indicator, disagrees with Trend Seeker as it’s bullish. The Stochastic indicator, a momentum indicator, is bullish as well. The 20-day and 50-day Moving Averages are converging rather quickly. A cross over of these averages is a bullish signal. A close above the Channel and the Trend Seeker being Up triggers an entry to the upside. There is potential resistance at the 440’0 price level, the last congestion area. If the market breaks through with Momentum the upside target is the 500’0 price level.
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