Beyond the "Spotlight"

By: Don DeBartolo

The GBE Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.

Highlighting This Week’s Potential Breakouts:

June 2013 British Pound

The June 2013 British Pound futures contract closed below a lower trend line on Friday. There are touches on the trend line at 1.4823 (3/12/13), 1.5027 (4/04/13), and 1.5192 (4/23/13). The Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral. The MACD, a trend indicator, is bearish and above the baseline. Although MACD is bearish, until the Trend Seeker changes to a Downtrend, there is no entry trigger confirmation. The Stochastic indicator is bearish and above the “over-sold” line. There is Momentum in this market as the ADX indicator is strong, reading 21.58. A potential sell entry could be on a retracement to the upward sloping trend line. Potential stop losses can go above recent resistance, the high of 1.5603 (5/01/13). A potential downside target is the twelve month contract low of 1.4823 (3/12/13).

August 2013 Feeder Cattle

The August 2013 Feeder Cattle futures contract appears to have found downside support forming a Triple Bottom. The lows are 145.250 (3/20/13), 144.500 (4/22/13), and 145.075 (5/08/13). In addition, the low of 145.075 completes a 1-2-3 Bottom Formation. A break of the number two point, 152.375 (4/25/13), will trigger a long entry. However, the Trend Seeker is Down and several technical indicators are bearish. This trade opportunity will take a patience. The market must also break a 20-day Exponential and 50-day Simple Moving Averages before reaching the breakout price. Potential stop losses will be determined if the market closes in on the breakout price. Upside targets can be the highs of 162.250 (1/28/13) or 164.050 (1/08/13).

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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.