In any given market there is never a time when all constituents move up together and vice versa. There is always an internal substitution at play. It is this game of musical chairs that helps us identify the sectors/sections that are exhibiting outperformance.
Once we are aware of the outperforming nature of certain ticker symbols, it becomes easier to select our avenues of investment.
Keeping that in mind, we are here to discuss two representatives from the commodity universe that are displaying strength.
For quite some time now we’ve been discussing Mustard and have covered the monster move that came through. We now have another breakout at our hands.
The price has broken out above its overhead resistance of 7,900. With this move, we can keep an eye on the next target of 10,640 in the weeks and months ahead.
The price has been gaining strength with every leg of the rally and we may see this carry forward as well.
We are bullish for as long as the price trades above the risk management level of 7,900.
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Another name that is attracting a lot of attention the world over, is Natural Gas. In the week gone by, the price managed to break out and close above the level of 333. This is the level of overhead supply that we’re tracking. A smooth move above this level and we could reach the target of 467 next.
It is also important to note that at times the price consolidates above the Fibonacci or resistance level before the follow-through. A consolidation above the crucial level is a positive. But a consolidation below the crucial level is not good. So the line in the sand for us is 333.
These were the two commodity constituents that stood out in terms of strength and reward/risk ratio. The narration of the commodity supercycle hasn’t been negated yet. We’re just part of a relay race where the commodities are passing on the baton as the market move progresses.
Thank you for reading and we’d be happy to address any questions you have!