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Commodities Daily Hotline
20 October 2014                             By Cornelia Dichio, Analyst
Chart of the day: Coffee unwinds from overbought...


The Coffee instrument has recorded a 3% loss for Friday's session.  The previous rally from the September floor near 180; and the 200-day moving average, had become overbought.  The price appears to be correcting that condition.  In the process, a failed break over the April ceiling has occurred, giving rise to fears for a further 'bull trap' pullback over the short term too.  Having said that, former resistance from the August/September ceiling near 210 could feasibly convert into support.  Otherwise, next potential support is near the 50-day MA, around 200.


Daily Comment:


Also in the Softs sector, Cotton has continued to drift away from the 50-day moving average.  A sustained break over the 65 region is required to lend a basing aspect to the pattern, and remove the risk that the downtrend is reasserting.

In contrast, the Rubber instrument has cleared resistance at the 50-day MA and sideways trading along 180.  That action has triggered the opening of a long trade (see Friday's hotline).  The stop is placed at 160 for the time being.

In the Grains sector, the recovery from the oversold contract low, at 904, by Soybeans is showing some loss of momentum on the approach to downtrend resistance at the 50-day MA.  It is still too early to tell whether the downward tendency has reasserted, though a clearance of that line is needed to remove that danger.

Also in this sector, Oats could be developing support mid-range, around the 340 mark; near the shorter-term MA.  We will consider purchasing a breakout, as a move through 360 would complete a large base that could promote further gains towards the 380 region.

Some improvement was noted in the Industrial Metals sector.

Aluminium, for example, gained 3.1% to reassert the recovery move from the oversold early-October low.  One observes that support along the lateral region near 1900 proved good last week.  The 'Bull' P&F Breakout signal at 1960 is noted.  However, we prefer to stay on the sidelines, as there is potential resistance near current levels from supply and the 50-day MA.

The Copper instrument has bounced from the mid-April low resulting in a failed break under the sideways trading around 6600.  This could augur a 'bear trap' recovery attempt over the short term, possibly towards downtrend resistance at the 50-day MA near 6800.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
LMAHDS03Aluminium HG LME 3m1972+3.1%
LMPBDS03Lead LME 3 Months2029+2.7%
Top 5 Losses.
SymbolStockClose% Change
KCZ4Coffee NYBOT (December 2014)210.65-3.0%
KC1Coffee NYBOT 1st Month Continuation210.65-3.0%
KC2Coffee NYBOT (cont)214.6-2.9%
XAUPHLX Gold & Silver Index77.0752-2.8%
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
10 Oct 2014 Cocoa NYBOT (December 2014) CCZ4 Long 3157 3118 -1.24% 2980
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
10 Oct 2014 Corn CBT (December 14) C Z4 Short 334 348 -4.19% 363
15 Oct 2014 Nickel LME 3 Months LMNIDS03 Short 15830 15700 +0.82% 18000
  • A long is opened in Rubber.
  • We watch to buy Oats.


Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEOversold downtrend towards the 2012 platform finds intraday support at 269.621.272.636-0.0% 266.78283.234/280.91
CLZ4Crude Oil NYME (December 14)Oversold decline shows a loss of momentum.82.06+0.1% 72.5/78.4793.82
XBZ4Gasoline RBOB NYME (Dec14)Oversold fall pauses near the mid-2012 low.216.46+0.7% 208.93248.83
HOZ4Heating Oil NYME (Dec 14)Oversold decline shows a loss of impetus.248.99+1.1% 241.56?272.49
NGZ4Natural Gas NYME (Dec 14)Dips under the late-Jul/mid-Oct range to question the base theory.3.863-0.6% 3.7964.252
QZZ4Coal (Dec 14)Holds the oversold fall.51.65-0.4% /62/60.4/60.02
GCZ4Gold CMX (Dec 14)'Bear trap' rebound from oversold slows slightly near the 50-day MA.1239-0.2% 1183.31297.6
PAZ4Palladium NYME (Dec 14)Failed dip under the early-Oct low (735). 'Bear trap' recovery follows.756.7+1.4% 699.1/729.95825.45/812.75
PLF5Platinum NYME (January 15)Recovery from the oversold and accelerated contract low struggles.1261.5+0.8% 1186.51350.2/1294.8
SIZ4Silver CMX (December 2014)Oversold fall towards the Feb 2010 low pauses.17.331-0.6% 15.73/16.6419.95/18.885
LMAHDS03Aluminium HG LME 3mReasserts the recovery from oversold after developing further support near sideways trading around 1900.1972+3.1% 1836/18852184/2119.5
LMCADS03Copper Grade A LME 3mFailed break under sideways trading along 6600. Potential 'bear trap' recovery scope towards downtrend resistance at the 50-day MA.6639+1.3% 6321/6513.256992/6825
LMPBDS03Lead LME 3 MonthsCounter move from oversold. Pauses the decline to the 2013 floor.2029+2.7% 1938/1961.52148/2120.25
LMNIDS03Nickel LME 3 MonthsOversold downtrend from the m-t top shows a minor loss of momentum.15700+1.5% 1483017501/16999
LMSNDS03Tin HG LME 3 MonthsOversold decline towards the small mid-2013 base area slows slightly.19305+0.3% 1880921468/20620
LMZSDS03Zinc Special HG LME 3 MonthsFailed break under Sept support. Potential top extension.2249+1.3% 2073.25/21732416/2354
FCX4Feeder Cattle CME (November 2014)Pauses the correction from the overbought contract high with a 'Trough' KDR. Potentially reasserting the uptrend.234.15-1.3% 222.4/231.75245.75
LCZ4Live Cattle CME (Dec 14)Pauses the correction from the overbought contract high. Possibly reasserting the uptrend.165.05-0.2% 147.225/157.45169.6
LHZ4Lean Hogs CME (Dec 14)Breaks s-t range support at the 200-day MA. Probes the Aug trough between 90-85, approx.90.575+0.3% 84.275105.5/99
C Z4Corn CBT (December 14)Recovery from the oversold contract low slows.348-1.2% 318.25/330.5381
O Z4Oats CBT (December 14)Extends the broad band.347.75+0.2% 311.5/326379.25/361.75
IJX4Rapeseed LIFFE (November 14)S-t rally slows near the late-Jul high Potential base extension.322-0.2% 300.5/308.75359.75/335.5
S X4Soybeans CBT (November 14)Recovery from the oversold contract low slows near downtrend resistance at the 50-day MA.951.75-1.5% 904999.75
SMZ4Soybean Meal CBT (December 2014)Extends the recovery from oversold to the Jul/early-Sept trading band starting near 340, where intraday resistance is noted.330.5-1.2% 288.8/295.1398.3/366.6/340?
BOZ4Soybean Oil CBT (December 2014)Ranging between the 50-day MA and Sept floor. Potential base.32.02-1.1% 31.5237.36/33.83
W Z4Wheat CBT (December 2014)Recovery from oversold probes downtrend resistance at the 50-day MA.516-0.2% 466.25591/579.25
QKX4Wheat LIFFE (November 2014)Reasserts the counter move from oversold. Retests the downtrend channel at the 50-day MA.116.45-0.5% 106.6/111124/120/117
CCZ4Cocoa NYBOT (December 2014)Ranging above support at the Sept low and 200-day MA.3118+1.0% 2874/30193399/3208
KCZ4Coffee NYBOT (December 2014)Corrects the overbought advance.210.65-3.0% 176.4243/225.5
CTZ4Cotton (December 2014)Recovery from the contract low pauses by the 50-day MA.63-0.9% 60.8368.48/65.65
LBX4Lumber CME (November 2014)Finds resistance by the Aug high. Retraces towards the Sept floor.334.6-0.1% 318.2/325364.5/354.3
JOX4Orange Juice (November 2014)Pauses the oversold decline.135-0.4% 125.9/132.45153.4/145.5
SBH5Sugar NYBOT (March 2015)Recovery finds intraday resistance at 17.2. Falls back under the 50-day MA.16.62-0.3% 15.51/15.8917.87/17.2

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