|Commodities Daily Hotline
24 February 2014 By Cornelia Dichio, Analyst
Having encountered support within the previous base; and close to the sideways area along 58, the Coal instrument has soared. However, Friday's 3.1% gain has taken the RSI to overbought territory. In recent months, similar RSI readings have been followed by sharp corrections. What is more, there is potential resistance from former support at the March 2013 low, around 82.5, close by. Therefore, with the risk of a reaction increasing, and the March contract coming towards the end of its lifespan, we book the profit on the long trade, making 4.88%.
The remaining profit is booked on longs held in the Grains sector.
The Kansas City Wheat contract, shown on the right, makes 3.02%. The chart displays the recovery becoming overbought, and indeed losing momentum beneath potential resistance from old support in the 700 region.
The trades in Oats, Soybean Meal and Rapeseed yield 8.57%, 3.59% and 2.35%, respectively.
The long position in Feeder Cattle is also closed with profits, 1.01%. Here, the short-term rally from the 50-day moving average is starting to struggle near after a new contract high at 172.1. Also, the March contract is expiring.
We err on the side of caution and book the remaining profit, 2.84%, on the long position in Tin. The rally has lost impetus near previously stiff resistance at the December high after becoming overbought.
Also in the Industrial Metals sector, Nickel has paused the short-term rally beneath the highs of the broad range. However, that pattern may yet turn out to be a large base formation. Still, we would prefer to await a breakout, requiring a move over 15000, before purchasing.
The CRB Index has enjoyed a surging recovery so far this year. Judging by the very high level of the RSI, that rally is now extremely overbought. The chart also shows valuations approaching prior firm resistance at the January 2013 high, at 305.817. Therefore, a correction by the Commodities gauge before long would not be surprising.
|NG2||Natural Gas NYME (cont)||5.012||+3.2%|
|QZH4||Coal (March 2014)||61.88||+3.1%|
|SBH4||Sugar NYBOT (March 2004)||16.72||+2.4%|
|SB1||Sugar NYBOT 1st Month Continuation||16.72||+2.4%|
|HO1||Heating Oil NYME 1st Month Continuation||309.92||-2.5%|
|HOH4||Heating Oil NYME (March 14)||309.92||-2.5%|
|WZ2||White Maize SAFEX (cont)||2467||-1.7%|
|HO2||Heating Oil NYME (cont)||303.89||-1.4%|
|KWH4||Kansas City Wheat (KCB) March 04||682.75||-1.3%|
- The remaining profit on all the prior longs is booked.
- We watch to buy Nickel.
|CRY||CRB Index NYFE||Overbought rally shows a minor loss of momentum.||301.584||+0.1%||272.036/279.392||305.817|
|CLH4||Crude Oil NYME (March 14)||Overbought rally slows.||102.92||-0.4%||93.73/95.21/96.26||104.52|
|XBH4||Gasoline RBOB NYME (March 14)||S-t rally becomes overbought.||283.33||-0.5%||252.29/259.42||287.36|
|HOH4||Heating Oil NYME (March 14)||Overbought rally falters.||309.92||-2.5%||289.05/296.6||318.48|
|NGH4||Natural Gas NYME (March 14)||Overbought rally slows.||6.135||+1.2%||4.143/4.563||6.83|
|QZH4||Coal (March 2014)||Surging rally becomes overbought.||61.88||+3.1%||55.21/55.78||65.75|
|GCJ4||Gold CMX (Apr 14)||Encounters resistance at its 200-day MA and is now overbought.||1323.6||+0.5%||1182.3||1361.1|
|PAH4||Palladium NYME (Mar 14)||Holds the s-t rally to the Jan highs.||740||+0.5%||683.55/695||766.95/753.3|
|PLJ4||Platinum NYME (April 04)||Points back to the Oct/Jan highs.||1427.9||+1.1%||1315.8/1361.4||1553.9/1483|
|SIH4||Silver CMX (Mar 2014)||Tests potential resistance at the 200-day MA. RSI overbought.||21.782||+0.5%||18.6/18.89||23.115|
|LMAHDS03||Aluminium HG LME 3m||Recovery towards resistance near the 200-day MA.||1771||-0.1%||1545/1671.25||1905.75/1839|
|LMCADS03||Copper Grade A LME 3m||Ranging above the Nov floor.||7155||0.00%||6910/7016||7379.5/7210|
|LMPBDS03||Lead LME 3 Months||Extends the broad l-t range.||2150||+0.6%||2037.75/2075.5||2289/2230.25|
|LMNIDS03||Nickel LME 3 Months||Trades in the upper half of the broad band/base highs.||14365||0.00%||13205/13650||15001/14880|
|LMSNDS03||Tin HG LME 3 Months||Overbougth rally slows near the Dec high.||23140||+0.2%||21300/21724||24000/23350|
|LMZSDS03||Zinc Special HG LME 3 Months||Finds resistance near the Dec/Jan ceiling.||2040||-0.4%||1855/1944||2123/2108|
|FCH4||Feeder Cattle CME (March 2014)||Pauses after a new contract high.||170.7||-0.2%||163.825/166||172.1|
|LCJ4||Live Cattle CME (Apr 14)||Overbought rally slows by the Jan high.||141.45||-0.3%||133.225/138.6||143.2|
|LHM4||Lean Hogs CME (Jun 14)||Holds the overbought rally near the contract high.||108.025||+0.2%||100/103.45||/|
|C H4||Corn CBT (March 04)||Overbought rally slows slightly.||453||-0.6%||406.25/421||462|
|O H4||Oats CBT (March 14)||Holds near the contract highs.||465.5||-0.6%||404.5/408||/|
|IJK4||Rapeseed LIFFE (May 14)||Trends up. RSI overbought again.||392||+0.8%||370.75/379||385|
|S H4||Soybeans CBT (March 14)||Rallies to the Aug/Sept ceiling. RSI high.||1370.75||+0.9%||1256.25/1262.5||1377.75|
|SMH4||Soybean Meal CBT (March 2014)||Uptrend. Trades near the contract high.||455.8||+1.1%||413.8/438.1||/|
|BOH4||Soybean Oil CBT (March 2014)||Recovery becomes overbought.||40.95||+0.9%||36.8||42.85|
|W H4||Wheat CBT (March 2014)||Overbought recovery slows.||609.75||-1.1%||550||652.1|
|QKK4||Wheat LIFFE (May 2014)||Base breakout?||157.5||+0.7%||151.05||167.85/158.5|
|CCH4||Cocoa NYBOT (March 2014)||Holds the uptrend near contract highs.||2929||-0.7%||2660/2865||/|
|KCH4||Coffee NYBOT (March 2014)||Overbought rally pauses.||168.55||-0.1%||110.2/113.15||157.2/144.15|
|CTH4||Cotton (March 2014)||Holds the uptrend above the 50 and 200-day MAs.||87.09||+0.8%||82.39/83.66||91.28/90.61|
|LBH4||Lumber CME (March 2014)||Broadly rangebound. Potential top.||363.6||+1.0%||343/347.6||384.1/373|
|JOH4||Orange Juice (March 2014)||Rangebound.||146.55||-0.4%||119.05/135.1||168.9/152.4/147.2|
|SBH4||Sugar NYBOT (March 2004)||S-t uptrend emerges.||16.72||+2.4%||14.7/15.31||17.85|
Copyright 2014 by Stockcube Research Ltd.