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Commodities Daily Hotline
19 August 2014                             By Cornelia Dichio, Analyst
Chart of the day: Crude extends downtrend

 

March support near 94 only provided a brief respite for the Crude Oil instrument, in response to the oversold RSI indicator.  On Monday, the price of this contract continued southwards, pointing towards the early-2014 floor at 88.70.  A move through 98 would be required to interrupt the downtrend, which has been in force ever since the June ceiling was established around 106.

 

Daily Comment:

 

In the Industrial Metals sector, Aluminium failed to maintain the nudge over the July high (1054.75) earlier in the month.  The subsequent 'bull trap' reaction appears to be already reversing.  It is possible that the uptrend towards the late-2012/early-2013 ceiling at 2184 is reasserting.  Note that the last pullback did not trouble the rising 50-day moving average.

In Meats, the Feeder Cattle issue seems to be developing uptrend support at the shorter-term MA.  The price of this contract had been unwinding from the overbought late-July contract high at 224.675.  We wait for further confirmation that the upward trend is reasserting before considering new longs.

Also in this sector, the Lean Hogs contract shows some signs of bullish interest after Monday's session.  The oversold decline from the summer high was extended, though one notes that intraday support arrived at 93.25.  Still, a push past the psychological 100 number, preferably on a dynamic move, is needed to confirm new support thereabouts.

In the Softs sector, the Cocoa instrument has extended the uptrend to a new contract high.  The RSI is now indicating the onset of an overbought state.  Therefore, wishing to maximise profits on the long trade held in the commodity, the stop is tightened again, to 3225, which is just beneath yesterday's low. 

In contrast, the Sugar issue breaks support at the important January floor at 15.72, dropping to a new contract low.  The RSI is displaying an oversold condition.  Nonetheless, a bounce through 16 is required to inspire hopes for a 'bear trap' recovery.

In yesterday's report, we ignored the 'Bull' P&F Breakout signal by Corn, as the recovery to date lacked dynamism.  The small counter move was extended during Monday's session.  However, intraday resistance arrived at 381, with a 'Peak' Key Day Reversal drawn by the end of the session.  While this feature is small in size, it could precede a retest of support at the lows near 360.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
RR1Rough Rice CBOT 1st Month Continuation13.145+1.9%
O 1Oats CBT 1st Month Continuation370.75+1.6%
NIBCocoa42.82+1.5%
O Z4Oats CBT (December 14)339+1.5%
O 2Oats CBT (cont)339+1.5%
Top 5 Losses.
SymbolStockClose% Change
SGGSugar47.05-2.1%
CO2Crude Oil IPE (cont)102.3-1.8%
UGASGasoline49.555-1.7%
CORNCorn26.18-1.6%
W U4Wheat CBT (September 2014)542.5-1.6%
 
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
19 May 2014 Nickel LME 3 Months LMNIDS03 Long 20100 18495 -7.99% 17400
27 Jun 2014 Cocoa NYBOT (September 2014) CCU4 Long 3120 3259 +4.46% 3225
7 Aug 2014 Lumber CME (September 2014) LBU4 Long 343 347.1 +1.20% 315
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
7 Aug 2014 Orange Juice (September 2014) JOU4 Short 139.25 147 -5.57% 155
  • The stop is tightened on long Cocoa again.
  • We watch to buy Feeder Cattle.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFERenews the oversold downtrend from this year's earlier top.288.197-0.6% 279.392313.271/300.384
CLV4Crude Oil NYME (October 14)Renews the downtrend after a short-lived bounce from oversold.93.92-1.5% 88.7/90.5497.75
XBV4Gasoline RBOB NYME (Oct14)Holds the downtrend towards the late-2013 floor.254.61-1.1% 246.46266.34
HOV4Heating Oil NYME (Oct 14)Finds stiff resistance at the 50 and 200-day MAs. Falls towards the 2013 floor.281.85-1.3% 275.95308.47/292.75
NGV4Natural Gas NYME (Oct 14)Retraces the counter move from oversold. Probes the Jul low.3.824+0.4% 3.589/3.744.041
QZV4Coal (Oct 14)Aug recovery slows near the 50-day MA.59.75-0.4% 58.9362/60.4
GCV4Gold CMX (Oct 14)Range develops between 1347 and 1280.5.1298.5-0.5% 1241.2/1280.51347
PAU4Palladium NYME (Sep 14)Extends the uptrend to a new contract high.894.9+0.0% 806.35/837.5/
PLV4Platinum NYME (October 14)Reasserts the downtrend from the Jul ceiling.1446.2-0.8% 1422.61523.8/1488.5
SIU4Silver CMX (September 2014)S-t down bias continues within the prior small base area.19.635+0.6% 18.6521.79/21.63
LMAHDS03Aluminium HG LME 3mPossibly reasserting the uptrend towards the late-2012/early-2013 ceiling.2019+0.9% 1904.25/19672184/2056
LMCADS03Copper Grade A LME 3mPauses the decline from sideways resistance near 7200.6905+0.5% 6614.75/68217460/7220
LMPBDS03Lead LME 3 MonthsPauses the advance. Tests support near the 50-day MA.2216+0.0% 2170.5/22002499/2329/2307
LMNIDS03Nickel LME 3 MonthsExtends the range forming beneath the May peak. Potential top.18495-0.9% 15695/1770021625/20495
LMSNDS03Tin HG LME 3 MonthsRetreat from 23000 slows above the June/July floor.22425-0.2% 21300/21724/2185023849/23070
LMZSDS03Zinc Special HG LME 3 MonthsReasserts the correction from the overbought July high. Probes the 50-day MA.2282+0.4% 2010/21732539.5/2416
FCU4Feeder Cattle CME (September 2014)Develops uptrend support at the 50-day MA.216.075+0.5% 209.2/211.65224.675
LCV4Live Cattle CME (Oct 14)Oversold s-t fall pauses near the May trading band.148.55+0.5% 140.55/144.925160.75
LHV4Lean Hogs CME (Oct 14)Extends the oversold fall. Intraday support is noted at 93.25.95.1+0.2% 90?118.35
C Z4Corn CBT (December 14)Small 'bear trap' recovery is capped by a 'Peak' KDR.371.5-1.5% 358?395.75/381
O Z4Oats CBT (December 14)Extends the m-t range.339+1.5% 311.5361.75
IJX4Rapeseed LIFFE (November 14)Retraces the recovery from oversold.321.5-0.1% 300.5359.75/335.5
S X4Soybeans CBT (November 14)Holds the downtrend.1057.75+0.5% /1118.75/1089.25
SMZ4Soybean Meal CBT (December 2014)Steadies in range by l-t sideways support around 340.355.1+0.5% 337.1366.6
BOZ4Soybean Oil CBT (December 2014)Extends the decline to a new contract low. RSI oversold.33.33+0.4% /41.4/37.36
W U4Wheat CBT (September 2014)Potential base forms between the Jul floor and 50-day MA.542.5-1.6% 518.5597.5/572
QKX4Wheat LIFFE (November 2014)Downtrend flattens somewhat.121.3-1.5% 119.5139.5/126.3
CCU4Cocoa NYBOT (September 2014)Uptrend becomes overbought after a new contract high.3259+1.0% 3040/3154/
KCU4Coffee NYBOT (September 2014)Correction from overbought hovers by the 50-day MA.188.9+0.1% 159.25/179.4220.6/207.4
CTZ4Cotton (December 2014)Pauses the oversold fall near the contract lows.63.84-0.8% 62.0284.74/78.74
LBU4Lumber CME (September 2014)Overbought s-t rally slows.347.1+0.5% 293/320370/354.6
JOU4Orange Juice (September 2014)Counter move from oversold struggles.147-0.8% 126.65/137.25154.3/151.5
SBV4Sugar NYBOT (October 2014)Extends the oversold fall from the m-t top. Breaks the Jan floor (15.72) falling to a new contract low.15.68-1.5% /18.91/17.44


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