Technical Analysis on Hot Commodities
Update: GLD, SLV, USO & UNG
Jun 29, 2009
Last week commodities moved
higher as investors started buying into the recent pullback in
prices. This is a healthy sign for the overall market. This is
a quick update for gold, silver, oil and natural gas short term
GLD Gold ETF Trading Chart
Gold has provided us
with two great trades this year. Both trades lasted only a few
weeks and we locked in profits on technical breakdowns. Many
of you have been asking when we will get a short signal (make
money in a down market). Well, I don't like shorting a commodity
that is in rally mode. KISS is my mentality and trading only
with the major trend is what I focus on.
For those of you who want to
short gold (DZZ Ticker) may do so at your own risk, I recommend
waiting for an extended rally of 10+ percent in price before
you start looking for a technical breakdown to short. The quicker
prices rise, the higher chance that a technical breakdown will
provide a quick shorting opportunity. Locking in profits within
a few days is crucial. In a bull market pullbacks in price are
generally quick and short lived.
SLV Silver ETF Trading Chart
Silver and gold generally
move in the same direction. These precious metals are looking
ripe for a low risk setup. What I am looking for is momentum
to turn up along with a reversal candle pattern. We continue
USO Oil ETF Trading Chart
Oil has had a solid
move the past 2 months. This chart is starting to look a little
bearish and if what I am seeing is correct for the short term
then we could see oil slide lower this week. But in the event
prices rally we could get a buy signal within 5-10 days if all
UNG Natural Gas ETF Trading Chart
Natural Gas has been
drifting sideways for over 2 months now. Everyone is excited
to catch this reversal when prices start to head north again.
Seems like most people are long UNG already from what I gather
because of the fear of missing the next big rally.
To be honest I have that fear
as well but I do not let it control my trading. As usual I follow
my simple trading model and trade when risk is low and the odds
are on my side. One thing that traders should remember is that
UNG (Nat Gas) looks to be bottoming from a very big sell off.
If in fact prices are reversing there will be plenty of opportunities
to buy it still. Even though I am really excited for this trade,
I continue to wait for my time. I would like to see the momentum
breakout and start moving higher before I buy anything.
Commodity Trading Conclusion:
Looks as though money
is starting to flow back into commodities. With any luck we could
have some buy signals this week. GLD and UNG have the best looking
charts for a buy signal currently.
As usual I wait for the trades
to unfold and come to use. Keeping risk low, scaling out of trades
to lock in profits where there is a technical breakdown and allowing
our core position to run for larger gains is my focus. I don't
forecast prices I just analyze prices and prepare for what two
scenarios will most likely occur within a couple days.
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Jun 29, 2009
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is intended solely for information purposes. The opinions are
those of the author only. Please conduct further research and
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