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Orange Juice Futures 2010 Commodity Trade Setup

Commodities / Futures Trading Dec 14, 2009 - 02:03 AM GMT

By: Patrice_V_Johnson

Commodities

Best Financial Markets Analysis ArticleIn this weekly issue, The J.E.D.I. Way will be covering price trends in the Futures, and Futures Options Markets for the long-term, intermediate-term, and short-term time periods for the MARCH 2010 ORANGE JUICE contract and then list one or more trading opportunities that The J.E.D.I. Way will be seeking to add to its current holdings.


Note: The futures options for the MARCH 2010 ORANGE JUICE FUTURES CONTRACT expire on February 19, 2009. The Futures for the MARCH 2010 ORANGE JUICE FUTURES CONTRACT expire on March 11, 2009 (However, please note that The J.E.D.I. Way plans on exiting all options trades before each option expires as The J.E.D.I. Way does not trade Futures)

LONG-TERM TREND (> 1YR) OF THE ORANGE JUICE FUTURE MARKETS: UP - (See Long-Term Chart below for further details)

THE J.E.D.I. WAY'S LONG-TERM (or POSITIONAL) FUTURES OPTIONS HOLDINGS [> 1yr]: T.B.A.

Note: The above portfolio was selected based on my analysis of the MONTHLY CHARTS below for Orange Juice.

But before we do that, it is important to note that 63 represents a significant long-term support as well for the MARCH 2010 ORANGE JUICE FUTURES. If prices ever close below this price level, it would signify that the long-term trend is indeed down and prices could retreat significantly lower. But for now, the long-term trend (>1 year) of the MARCH 2010 ORANGE JUICE FUTURES is UP!

INTERMEDIATE TREND OF THE ORANGE JUICE FUTURES MARKET (Three weeks to 1 Year): UP (See Weekly Chart below for further details)

THE J.E.D.I. WAY'S INTERMEDIATE TERM FUTURE OPTIONS HOLDINGS (3 weeks to 1 year): T.B.A.

Note: This was based on my analysis of the WEEKLY CHARTS below for Orange Juice.

SHORT-TERM TREND OF THE ORANGE JUICE FUTURES MARKET (less than 3 weeks): UP (See Daily Chart below for further details)

THE J.E.D.I. WAY'S SHORT-TERM FUTURES OPTIONS HOLDINGS (less than 3 weeks): T.B.A.

Note: This was based on my analysis of the DAILY CHARTS below for Orange Juice.

TRADING OPPORTUNITIES IN MARCH 2010 ORANGE JUICE FUTURES OPTIONS FOR THE SHORT-TERM (less than 3 weeks), INTERMEDIATE-TERM (3 weeks to 1 year) and LONG-TERM (greater than 1 year):

SHORT-TERM (< 3 WEEKS) TRADING OPPORTUNITIES IN THE FUTURES OPTIONS FOR MARCH 2010 ORANGE JUICE:

MARCH 2010 ORANGE JUICE 125 PUT OPTION (Ticker Symbol: OJH1 125P)

While the long-term trend and the intermediate-term trend of ORANGE JUICE is up, The J.E.D.I. Way believes that ORANGE JUICE could pull back in the near term and possibly close below the "FAN LINE" (or below 127) in the Daily Chart (above the one above), thus we will not trade the MARCH 2010 ORANGE JUICE 2010 125 PUT OPTION until our SETUP for this particular option has to be met. That is, until the put option premium price for the March 2010 125 Put option trades above its 10 Day Moving Average (red line) in the chart above at around 11, if it ever does.

NOTE: I will send an alert out if the MARCH 2010 125 Put Option trades below above its 10 day moving average at around 11.

INTERMEDIATE-TERM TRADING OPPORTUNITIES (3 Weeks to 1 Year) IN THE FUTURES OPTIONS FOR MARCH 2010 ORANGE JUICE:

MARCH 2010 ORANGE JUICE 140 CALL OPTION (Ticker Symbol: OJH1 140C)

The J.E.D.I. Way will not trade the the March 2010 ORANGE JUICE 140 CALL OPTION (Ticker Symbol: OJH1 140C) since the premium price extended far beyond what would of been our entry point for this particular call option....4.50, and since it appears that the call option premium price may come back down near the 10 Day Moving Average (above - red line) and possibly go through it before going back up again above the 10 Day Moving Average. It has done this many times (as you can see above) since the bull market began in ORANGE JUICE in May 2009 with the premium price rising over time from 2.5 to 7.5.

Rather, we will wait for another BUY SETUP for this option to generate an ENTRY signal before going long this call option. The details for our BUY SETUP will come in time.

NOTE: If the preimum for the 140 call trades below its 10 Day Moving Average, The J.E.D.I. Way's BUY SETUP for the MARCH 2010 ORANGE JUICE 125 PUT OPTION (Ticker Symbol: OJH1 125P) will most likely be met and if so an ENTRY ALERT will be issued for this particular put option. But this trade will most likely be brief since the long-term trend (> 1year) and the intermediate-term trend (3 weeks to 1 year) for ORANGE JUICE is up. Thus after prices pull back, at some point in time, prices will trade with the overall major and intermediate trend of the market....UP.

LONG-TERM TRADING OPPORTUNITIES (3 Weeks to 1 Year) IN THE FUTURES OPTIONS FOR MARCH 2010 ORANGE JUICE: None.

Orange Juice Futures Options Contract Specifications: OJ, ICE [NYBOT] Options Expiration: 02/19/10 Days to Expiration: 70 Orange Juice Mar 2010 Closing Price Friday, December 11, 2009: 130.70 Price Value of Option Point: $150

Orange Juice Futures Contract Specifications:OJ,ICE [NYBOT]

Trading Unit:  15,000 pounds
Tick Size:  $.0005/lb = $7.50
Quoted Units:  US $ per pound
Initial Margin:  $1,890 Maint Margin: $1,350
Contract Months:  Jan, Mar, May, Jul, Sep, Nov
First Notice Day:  First business day of contract month.
Last Trading Day:  14th business day prior to the last business day of the month.
Trading Hours:  7:00 a.m. to 3:15 p.m. New York Time.
Daily Limit:  movable 10 cents per pound above/below the previous day's settlement price

Thanks for listening, and good luck with your trading.

Best Regards,
Patrice V. Johnson

E-mail : Patrice@stockbarometer.com if you have any questions about this trade or any other questions or comments.

If you are interested in continuing to receive our advice as your free trial, please click the following link to subscribe.
http://www.stockbarometer.com/pagesJEDI/learnmore.aspx

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2009 Copyright Patrice V. Johnson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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