Wednesday, August 28, 2013

Potential Breakout in Commodities? Check Out This $DBC Chart

We're looking at at a potential breakout in the DB Commodities Tracking Index, or DBC.

You can see that DBC already broke out of one consolidation area. Now, it is up against strong overhead resistance from a weekly downtrend.
Will it break out? I think so -- powered by oil, precious metals, and agriculture.

Commodities ended up big yesterday (DBC up 1%) as worries over Syria resulted in big rallies in the  precious metals and energy. Another piece of stronger-than expected Chinese economic data (industrial profits were better than estimates) and a weaker U.S. dollar also helped push commodities higher, but really yesterday was all about Syria. 
Although commodities have lagged badly this year, that trend may be ending.

While most major global stock markets are down around 2% so far this week, the commodity ETF DBC is up 2.3%, to a 4+ month high.

The DBC is very liquid -- an average 1.8 million shares per day. The DBC tracks an index composed of Light Sweet Crude Oil (WTI), Heating Oil, RBOB Gasoline, Natural Gas, Brent Crude, Gold, Silver, Aluminum, Zinc, Copper Grade A, Corn, Wheat, Soybeans, and Sugar.

1 comment:

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