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Commodities Daily Hotline
9 April 2014                             By Cornelia Dichio, Analyst
Chart of the day: Crude eyes 104

 

The Crude Oil instrument initiated a strong recovery after the floor at 91.35 was established in the first half of January.  The RSI was displaying an oversold situation at the time.  A few weeks later and the indicator was showing an overbought condition.  The rally was capped at 104.48 on 3 March.  Since then, the contract price has unwound from overbought, and is already on the way back to this year's earlier barrier.  If a breakout can be maintained, next chart resistance is at the April 2011 pinnacle at 107.49.

 

Daily Comment:

 

In the Industrial Metals sector, Zinc has extended its recovery from oversold and 'bear trap' counter move (following the failed break under the February low).  A downward dynamic would be needed to offset a further rally towards the December - March highs near 2100-2150.

The Rubber instrument has registered a 2.4% loss.  The rally from this year's early small base is struggling beneath supply from the much larger top formation, near 255; and the 200-day moving average is also depressing prices.  That line has to be crossed in order to remove the risk of a further retracement of the prior recovery.

The Lean Hogs issue has also recorded a 2.4% loss, as it extends the correction from the overbought high.  The price is probing potential support from the shorter-term MA.  In order to lock in a profit, the stop on the short held in the instrument is lowered to 121.5; placed just over Tuesday's high.

The reactions from overbought by Wheat products have halted, though in the case of the LIFFE Wheat contract, a strong recovery has been launched from 160.  Here, prices are racing back to the October - March ceiling at 172.75.  The next chart barrier after that is the July 2013 high at 175.5.

Also in the Grains sector, Corn is about to retest resistance at the 3 September 2013 (513) and 1 April highs (512.5).  In view of that barrier, we book the profit, 1%, on the long trade.

In the Softs sector, Orange Juice is also challenging prior resistance; at the early-March high at 157.25.  The long trade is closed here too, making 1.14%.

The long in NYBOT Coffee is closed with profits, 11.39%.  The rally from support at the 'Trough' Key Day Reversal low of 24 March and 50-day MA encountered intraday resistance ('thin upper tail' on the last candle) near March resistance.

 

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
O K4Oats CBT (May 14)435+3.8%
O 1Oats CBT 1st Month Continuation435+3.8%
XAUPHLX Gold & Silver Index95.1996+2.4%
DFK4Coffee LIFFE (May 2014)2174+2.4%
DF1Coffee LIFFE (1st mth Cont)2174+2.4%
Top 5 Losses.
SymbolStockClose% Change
JN1Rubber TCM 1st Month Continuation239.6-2.4%
MO1Carbon Emission (Cont)4.85-2.4%
MOZ4Carbon Emission IPE (Dec 2014)4.91-2.4%
LHM4Lean Hogs CME (LH Jun 2014)118.75-2.4%
LH2Lean Hogs CME (cont)118.125-2.2%
 
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
17 Mar 2014 Cocoa NYBOT (May 2014) CCK4 Long 3027 2992 -1.16% 2850
25 Mar 2014 Cotton (May 2014) CTK4 Long 94.11 91.79 -2.47% 89
26 Mar 2014 Feeder Cattle CME (May 2014) FCK4 Long 179.125 178.875 -0.14% 174
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
3 Apr 2014 Lean Hogs CME (LH Jun 2014) LHM4 Short 123.55 118.75 +3.89% 121.5
  • Profits are booked on long Coffee, Corn and OJ.
  • The stop on Lean Hogs is lowered.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFERally from the s-t range lows to the early-Mar high questions top theory.307.977+1.2% 279.392/299.222321.36/311.49/308.375
CLK4Crude Oil NYME (May 14)Renews the s-t rally towards the early-Mar high.102.56+2.1% 97/98.86107.49/104.48
XBK4Gasoline RBOB NYME (May 14)'Bear trap' rally back towards the early-Mar, and contract, high.298.01+1.8% 278/282.52304.14
HOK4Heating Oil NYME (May 14)Rallies from support at the lows of the broad band in force since July towards initial resistance.293.44+1.5% 283.93307/296.07
NGK4Natural Gas NYME (May 14)Finds support near the sideways area around 4.20. Tests the late-Mar high.4.534+1.3% 3.85/4.2214.893/4.669/4.57
QZK4Coal (May 2014)Reasserts the rally from the mid-June/mid-Feb trading band/base. Retests initial resistance.60.47+0.1% 55.43/58.463.6/60.53
GCM4Gold CMX (Jun 14)Reverses the correction from overbought.1309.1+0.8% 1233/1277.41431.8/1392.2
PAM4Palladium NYME (Jun 14)Finds stiff resistance beneath the Mar high. Support at the 50-day MA holds.775.85+1.1% 746.3/756.35802.45/792.85
PLN4Platinum NYME (July 14)Possibly reasserting the s-t rally towards the Oct-Mar ceiling.1441.7+1.0% 1367.6/1395.21490.1/1452
SIK4Silver CMX (May 2014)Fall from the 200-day MA shows a loss of impetus within the late-Nov/early-Feb base.20.057+0.8% 18.8/19.575?23.145/22.215
LMAHDS03Aluminium HG LME 3mOverbought rally has paused.1819+0.1% 1671.25/1704.251905.75/1849.25
LMCADS03Copper Grade A LME 3mPossibly reasserting the recovery from oversold, as intraday support arrives at 6577.5.6671-0.1% 6376.25/6577.57379.5/7220
LMPBDS03Lead LME 3 MonthsMar recovery from oversold yields to ranging.2073+0.4% 1986/2013.252230.25/2097
LMNIDS03Nickel LME 3 MonthsHolds the rally from the large base. RSI high.16455+0.3% 14830/1569517340
LMSNDS03Tin HG LME 3 MonthsRanging beneath the Oct high.23205-0.1% 21724/2245024000/23650
LMZSDS03Zinc Special HG LME 3 Months'Bear trap' recovery. Points to the Dec-Mar highs.2027+1.2% 1855/19372143.5
FCK4Feeder Cattle CME (May 2014)Pauses the uptrend after a new contract high.178.875+0.0% 175.7/176.375/
LCM4Live Cattle CME (Jun 14)Uptrend falters.135.275+0.3% 132/134.325139/137.525
LHM4Lean Hogs CME (Jun 14)Extends the correction from overbought to potential support at the 50-day MA.118.75-2.4% 103.45133.425
C K4Corn CBT (May 14)Reasserts the advance. About to retest the 3 Sept 2013 high.507+1.6% 452/473.25527.5/513
O K4Oats CBT (May 14)Counter move tests the downtrend from the early-Mar peak.435+3.8% 356.25/386504.5/460
IJK4Rapeseed LIFFE (May 14)S-t rally pauses beneath the overbought Mar high.413.25+0.5% 386.25/396429.25/419.75
S K4Soybeans CBT (May 14)Rally pauses after a new contract high on 2 April.1482.5+1.2% 1365.5/1393.251496
SMK4Soybean Meal CBT (May 2014)Pauses the overbought rally after a new contract high with a (small) 'Peak' KDR.478.1+0.8% 431/450.2486
BOK4Soybean Oil CBT (May 2014)Reasserts the recovery to recent resistance at 42.35.42.11+1.6% 37.13/39.8545.83/45.05/42.35
W K4Wheat CBT (May 2014)Pauses the correction from overbought.681+0.7% 637/658.75754.25/723.5
QKK4Wheat LIFFE (May 2014)Strong recovery towards the Oct-Mar ceiling.167.5+2.4% 156/160172.75
CCK4Cocoa NYBOT (May 2014)Continues to find uptrend support along 2900; near the 50-day MA.2992+1.1% 2670/28743039
KCK4Coffee NYBOT (May 2014)Rally from the 24 Mar 'Trough' KDR and 50-day MA approaches the Mar high. Intraday resistance is noted at 202.8196.5+1.6% 162.05/166209.75
CTK4Cotton (May 2014)Eases back to uptrend support near the 50-day MA.91.79+1.3% 86.12/89.84100.16/97.35
LBK4Lumber CME (May 2014)Retraces the recovery to the Mar floor, which holds.328.8-0.6% 309.9/324.5366.7/345.8
JOK4Orange Juice (May 2014)Choppy uprend. Tests the Mar high.155.5+0.9% 141.95/146.7168.9/157.25
SBK4Sugar NYBOT (May 2014)Ranging beneath resistance near the early-Mar high. Potential top.17.16+1.3% 15.57/16.6719.67/18.47


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