For the Week of January 03, 2017
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 March 2017 Chicago Wheat futures contract is setting up for a potential breakout to the upside. There is a trend line above recent session highs acting as a resistance level with touches of the trend line from mid-October, through early and late November, and into mid-December. A close above the trend line triggers an entry to the upside. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently down, though with a neutral ranking. Perhaps on a close above the trend line the Trend Seeker will change to up. The MACD, a trend indicator, has hooked bullish below the baseline. The Stochastic indicator, a momentum indicator, is weak but showing some upside momentum potential. The 20-day and 50-day Moving Averages are flat, but converging. A crossover of these two averages is another bullish confirmation. A stop loss should go below the double bottom lows of 393’0 (12/01/16) and 392’6 (12/23/16), or at least below the 400’0 price level. The upside target is high of the 10/14/16 trading session and first point on the trend line (445’6).
The March 2017 Feeder Cattle futures contract appears to be rolling over to the downside after two months of rallying 20.000 points. The contract has found resistance near the 128.000 price level over the last two trading weeks. A trend line has formed with the recent session lows along the 20-day Moving Average, which is where the current contract price is a trading (125.200). A crossover of this Moving Average with the 50-day Moving Average confirms a short entry trade. More so a close below the trade line will trigger the short entry opportunity. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently up, though with a weak ranking. The MACD, a trend indicator, has hooked bearish above the baseline. The Stochastic indicator, a momentum indicator, has shifted downward. A stop loss would be placed above the recent session highs and resistance level (128.000). The downside target is 118.400, a 50% retracement of the last two months rally.
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