A Glance at the Commodities Market through Charts Reveals an Uptrend

Commodities Market

Analysts believe the commodities market seems to be positioned for a major uptrend, as charts tell the story.

Trading software is all about providing comprehensive and objective market information to those carrying out online stock trading. An integral part of understanding this market information is the ability to study charts. It can give you an objective view of the market and you get all the facts at one glance. Investors and analysts bank on charts to make the right decisions.

The commodities market is going through an uptrend, and that can be seen through charts. Investors are after gold, copper and other such hard assets. This movement by investors is an indication that markets are close to a point of inflection. The charts reveal a rise in prices. This could mean that the money is getting into positions that are defensive, according to this analyst’s report on Investopedia.

A Long-term Buy Signal Emerges

Let’s look at the iPath Bloomberg Commodity Index Total Return ETN ($DJP).  This is a collection of physical commodity stocks that is getting significantly more popular with the growing interest in exchange-traded products. The $DJP ETN contains unleveraged investments in terms of copper, gold, silver, WTI crude oil, corn, soybeans, aluminum, etc. Now let’s look at the chart by StockCharts.com displayed in Investopedia.

image of commodities index chart bloomberg

 

As is clearly evident, the price action that occurred recently has caused a bullish situation. The stock has risen higher than the neckline of a pattern that can be described as inverse-head-and-shoulders. This is in alignment with the golden cross, which is the 50-day and 200-day moving averages crossover. That presents a long-term buy signal, which is a technical indicator of a long-term commodities uptrend. It’s still early days though.

Analysts Believe This to Be the Right Time for Gold

Let’s examine gold now.

image of Gold commodities market technical chart

As can be seen from the chart above depicting the SPDR Gold Shares ($GLD), gold has gone through a recent retracement and that’s really attracting active traders all over the world. The price has therefore soared to the 200-day moving average’s long-term support. This support could perform like a strong floor. It could be used to determine when to place buy and stop orders. Gold buyers find the risk-reward setup attractive which indicates this to be the right time to buy if gold shifts higher in 2018.

Copper Could Keep Soaring

Moving to copper, it has been among those commodities that has performed really strongly following President Donald Trump’s election.

image of Copper commodities chart

The chart above, describing the iPath Bloomberg Copper Subindex Total Return ETN ($JJC), tells you that there has been a massive focus on infrastructure spending which has caused a really strong uptrend. Most traders will be expecting this metal to keep soaring. Stop-losses could be set below the level of the recent breakout, or the 50-day or 200-day moving average, based on risk tolerance.

So if you’re looking at the commodities sector and are considering gold, copper and other metals, you have a reasonably clear indication provided by these charts. With advanced trading software, you get such objective analysis, keeping you in step with the markets.  Trade ETFs that track commodities and also commodity related stocks commission free both long and short with TradeZero.

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TradeZero

TradeZero is an online broker dealer that offers commission free trading of the US equity markets, US equity and index options trading, along with a 14,000+ symbol short list of the US markets. Its clients receive up to 6 to 1 intraday leverage and the ability to trade the US markets without any pattern day trading rules. TradeZero clients have access to a variety of cutting edge trading platforms which include real-time streaming market data.

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