Weekly technical chart of the Dow Jones-UBS Commodity Index
shows a positive divergence between the price action and oscillator indicator
(RSI 14 day period). The DJUBS Commodity index provides a diversified
representation of the commodity markets. The index components consist of
exchange traded futures on physical commodities, and currently represents 20
commodities individually weighted to account for each markets economic
significance and market liquidity.
Technical profile:
The commodity index trending downward from April 2014 tends
to show a weakness in price momentum where price action moved from $97 higher
low to $85 lower low resulted in higher low find in the RSI 14 day period after
reaching an over-sold area of 18 level.
The weekly candle pattern on 5/10/2015 ended with an engulf
pattern while the supply trendline in the RSI 14day period was breached to
currently trade at 39.01.
Trade Implication:
Technical scope reveals a bottom in commodities based on the
analysis above. Intermarket analysis depicts investors may pitch their tent in
commodities and commodity related currencies due to the expect decline in
Dollar thereby making commodities safe haven. Precious metals such as Gold,
Sliver and Platinum is expected to rally in the upside in the near term
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