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Will Commodities Bounce? USO, UGA, XME, DBB, JJC, JJN, SLX

|Includes: DBB, JJC, JJN, SLX, UGA, The United States Oil ETF, LP (USO), XME

The commodities sector has been a roller coaster ride the last couple of months. The selling over the last week has presented some interesting charts and they bear looking at for some opportunities. First,  let’s start with crude oil.

As you can see above the price of crude has been in a trading range. There attempt to break above the $42 level was met with resistance several times and over the last few trading days retreated again towards the bottom of the range. The question mark is do we test support at the bottom of the range and bounce? I say yes. If it doesn’t pan out no harm, no foul. There is support at $37 and $35.50 or the bottom at $34.40. All offer potential entry points if they hold. Watch for a possible play at each of these levels.

The chart above is gasoline and we see a similar trading range with the exception it broke from the range heading higher. The reversal is an opportunity when and where we find support. The $34.30 or $32.60 mark are two we are looking at. It is worth playing on the reversal back to the upside.

The metals and mining stocks have struggled as well. The chart above shows the selling over the last week the struggle to hold the move to the previous high near $60. A test of the 200 day moving average and 49.65 level is poised to bounce. Look to hold support at this level and them move up 8-10%.

Base metals ETF shows the test of support near the $19.20 level with the February lows at $18.50. Look for a bounce off one of these levels and a move back toward the previous high. There is resistance at the $21.10 level on the bounce. It could stall and consolidate at this level so plan and adjust accordingly. DBB allows you to capture all the base metals the charts of the individual metals are equally as attractive for short term opportunities. Below are the charts of JJC – Copper, SLX – Steel and JJN – Nickel to review.

As with any investment discipline, defined strategy and focus are essential. Measure the risk relative to your investment psychology and manage the risk associated with investing your money.

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Disclosure: no positions