From the Desk of Ian Culley @IanCulley
Stocks aren’t the only assets catching a bid.
Commodities are, too.
Despite their current rallies, the average investor isn’t concerned with cocoa, cotton, and lean hog futures.
I get it… What do lean hog futures have to do with Tesla $TSLA?
But Dr. Copper – with its Ph.D. in economics – is ripping higher this week.
And crude oil is trading above our risk level outlined last month.
Check out crude oil futures slicing through the 75 level:
Kudos to those who took the signal, as it’s over a third of the way to our target of 83.
Crude is up 0.75% today alone, heading into the close with an intra-day high of 78.21. I like seeing strength heading into Friday’s close, as it often spills into the following week.
I imagine crude will hit our target within the next few weeks.
I’m taking profits at our target without question. The 83 level marks a logical potential resistance zone. And crude trades closer to the lower bounds of a much larger consolidation.
I believe crude will eventually break above 83 further down the road. When it does, we can turn our sights toward 95.
For now, our bullish commodity trades are working. Cocoa has yet to roll over. And the two most influential procyclical commodities – copper and crude oil – look constructive.
That’s not a bad view for commodity and stock market bulls.
Stay tuned!
COT Heatmap Highlights
We’re in the process of updating our COT table.
Thank you for your patience. And look for a post early next week, highlighting commercial positioning across the futures markets.
Trade of the Week
Today, we’re outlining Reliance Steel & Aluminum Co. $RS, a $16B company operating an industrial metal distribution center:
We highlighted RS in our Under the Hood scan back in March of 2022. It hit our target last summer, forming a bullish continuation pattern. And we want to ride the next leg higher once that pattern is completed.
We’re buying RS on strength above 290, targeting 422 in the coming 6-12 months.
Thanks for reading.
As always, let us know what you think. We love hearing from you.
And be sure to download this week’s Commodity Report below!
Allstarcharts Team
