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Commodities Daily Hotline
8 August 2014                             By Cornelia Dichio, Analyst
Chart of the day: OJ reasserts downtrend


Orange Juice has generated a bearish P&F Breakout signal on the fall through 139.25 by the automated scanner.  This one-year Bar chart displays the small recovery from oversold (see recent low level of the RSI) reversing, as the downtrend from the June ceiling reasserts.  We follow the P&F signal, as important support is not until the late-2013 floor at 126.65.  Since the RSI is still at a low level, the stoploss is placed at a safe distance for now, at 155; just over the late-July recovery high.


Daily Comment:


The Lumber instrument gained 3% for Thursday's session, taking the price over downtrend resistance at the 200-day moving average; situated near 343.  A long trade is opened following that event (see hotlines for 6 and 7 August).  The stop is placed at 315 for the time being.

Also in the Softs sector, Thursday's Chart of the Day subject, LIFFE Sugar, extended is recovery from the January floor during yesterday's session.  However, intraday resistance was encountered at the 20-day MA downtrend channel.  The price went on to wipe out the 'Trough' Key Day Reversal from 330.3 to challenge the early-2014 platform, at 428.6, once again.  A sustained push over 445 is needed to remove pressure from that floor.

The Feeder Cattle issue has produced a bearish signal on the P&F scanner.  This follows the move through 219.8.  The Candlestick chart printed on the right displays potential for a 'bull trap' (after the fall back under the July high) reaction, initially towards the rising 50-day MA, which is close to last month's low near 210.  The stop is placed at 227.

Contracts in the Precious Metals sector improved yesterday.  Palladium's correction from the overbought July ceiling at 890 shows a loss of momentum near the shorter-term MA.  Perhaps the instrument is starting to reassert the uptrend.

In Energies, Gasoline has launched a recovery from oversold; and support at the early-2014 floor area.  We would point out that there is potential resistance starting along the 280 mark.

Also in this sector, Natural Gas' small recovery from the July oversold low faltered yesterday, after intraday resistance arrived at 3.981.  Even if the counter move manages to get going again, the domineering feature of this picture is the top formation built up over several months this year.  That supply zone is likely to intimidate bulls (if it is ever reached in the first place).

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
LBU4Lumber CME (September 2014)346.3+3.0%
LB1Lumber CME 1st Month Continuation346.3+3.0%
LB2Lumber CME (cont)342.6+3.0%
XB2Gasoline RBOB NYME (cont)264.33+1.3%
PLATLondon Spot Platinum1480.5+1.2%
Top 5 Losses.
SymbolStockClose% Change
MO1Carbon Emission (Cont)5.94-4.3%
MOZ4Carbon Emission IPE (Dec 2014)5.96-4.3%
KCU4Coffee NYBOT (September 2014)184-3.6%
KC1Coffee NYBOT 1st Month Continuation184-3.6%
KC2Coffee NYBOT (cont)188.15-3.4%
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 18905 -5.95% 17400
27 Jun 2014 Cocoa NYBOT (September 2014) CCU4 Long 3120 3232 +3.59% 3000
7 Aug 2014 Lumber CME (September 2014) LBU4 Long 343 346.3 +0.96% 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 139.25 139.2 +0.04% 155
7 Aug 2014 Feeder Cattle CME (September 2014) FCU4 Short 219.8 217.725 +0.94% 227
  • A long is opened in Lumber; and shorts in Feeder Cattle and OJ (Chart of the Day).


Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEOversold downtrend from this year's earlier top slows.293.084-0.3% 279.392313.271/300.384
CLU4Crude Oil NYME (September 14)Renews the oversold fall to the May low.97.34+0.4% 95.51/96.43106.64/103.45
XBU4Gasoline RBOB NYME (September 14)Counter move from oversold. Finds support above the early-2014 floor.277.23+1.2% 266.07/269.83307.24
HOU4Heating Oil NYME (September 14)Rallies from sideways support along 285. Points back to resistance at the 50 and 200-day MAs.289.57+0.7% 275.75/283.12308.47/292.75
NGU4Natural Gas NYME (September 14)Counter move from oversold finds intraday resistance at 3.981.3.876-1.4% 3.582/3.7254.874
QZU4Coal (September 2014)Downtrend pauses near the Mar low.60.08-0.0% 59.4866.05/61.6
GCV4Gold CMX (Oct 14)Reverses the s-t downtrend.1311.6+0.3% 1241.2/1280.51347
PAU4Palladium NYME (Sep 14)Possibly reasserting the uptrend after correcting from overbought.856.05+0.8% 806.35/837.5?890
PLV4Platinum NYME (October 14)Reverses the downtrend from the Jul ceiling.1481.5+1.1% 1422.6/1451.11549.9/1523.8
SIU4Silver CMX (September 2014)S-t down bias slows near the upper side of the prior small base area.19.99-0.2% 18.6521.79/21.63
LMAHDS03Aluminium HG LME 3mPossibly reasserting the advance after a brief correction from overbought.2027+0.1% 1904.25/19672184/2054.75
LMCADS03Copper Grade A LME 3mExtends the range forming below sideways resistance near 7,200.6999+0.4% 6614.757460/7220
LMPBDS03Lead LME 3 MonthsHolds the advance. Remains above support near the 50-day MA.2265+1.0% 2170.5/22002499/2329/2307
LMNIDS03Nickel LME 3 MonthsExtends the range forming beneath the May peak. Potential top.18905+0.9% 15695/1770021625/20495
LMSNDS03Tin HG LME 3 MonthsRetreats from 23000 towards the June/July floor.22400+0.5% 21300/21724/2185023849/23070
LMZSDS03Zinc Special HG LME 3 MonthsPauses the overbought advance.2329-1.2% 2010/23212539.5/2416
FCU4Feeder Cattle CME (September 2014)Overbought uptrend has paused. Potential 'bull trap' over the Jul high.217.725-1.4% 209.2224.675
LCV4Live Cattle CME (Oct 14)Overbought uptrend has paused. Falls to support at the 50-day MA.153-1.9% 149.45160.75
LHV4Lean Hogs CME (Oct 14)Drifts towards Apr support; near the 200-day MA. RSI oversold.100.25-1.9% 96.2118.35
C Z4Corn CBT (December 14)Pauses the oversold fall near the lows.371.25-0.8% 361?447.75/395.75
O Z4Oats CBT (December 14)Extends the m-t range.336.75-1.0% 311.5361.75
IJX4Rapeseed LIFFE (November 14)Pauses the recovery from oversold.327+0.4% 300.5359.75/335.5
S X4Soybeans CBT (November 14)Extends the s-t range after failing to maintain the nudge under the Jul low (bear trap).1078-0.2% 1054?1246.25/1118.75
SMZ4Soybean Meal CBT (December 2014)Plots a 'Trough' KDR by l-t sideways support around 340.347.5-0.2% 337.1398.3/366.6
BOZ4Soybean Oil CBT (December 2014)Holds the decline near the contract low.36.05-0.4% 35.6341.4/37.36
W U4Wheat CBT (September 2014)Recovery slows near the 50-day MA. Potential base.561.5-1.1% 524.25607/597.5
QKX4Wheat LIFFE (November 2014)Counter move from oversold slows.125-0.8% 119.5144/139.5
CCU4Cocoa NYBOT (September 2014)Maintains the uptrend near the contract highs.3232+0.4% 2861/3040/
KCU4Coffee NYBOT (September 2014)Corrects from overbought.184-3.6% 138.25/159.25220.6/207.4
CTZ4Cotton (December 2014)Pauses the oversold fall near the contract lows.64.02-0.5% 62.0284.74/78.74
LBU4Lumber CME (September 2014)Breaks downtrend resistance at the 200-day MA. RSI high.346.3+3.0% 293/320354.6/349.3
JOU4Orange Juice (September 2014)Reasserts the downtrend. RSI near oversold levels again.139.2-1.2% 126.65/137.25154.3/144.35
SBV4Sugar NYBOT (October 2014)Renews the oversold fall from the m-t top towards the Jan floor.16.05-1.7% 15.7218.91/17.44

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