Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Is a Stock Market Crash Imminent or Does this Stock Market Bull Still Have Legs - 25th Apr 18
Gold Price Focusing on May Cycle Bottom - 25th Apr 18
Cash “Vanishes” From Bank Accounts In Ireland - 25th Apr 18
Is the Malaysian Economy a Potemkin Village - 25th Apr 18
Land Rover Discovery Sport Rattling / Knocking Sounds From Car Pillars - 25th Apr 18
China Takes the Long View on Gold-Silver... and So Should You - 25th Apr 18
Russia Buys 300,000 Ounces Of Gold In March – Nears 2,000 Tons In Gold Reserves - 24th Apr 18
Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - 24th Apr 18
CRYPTOCURRENCY MASTERCLASS #CRY90 - 24th Apr 18
UK Gambling Statistics - What the Numbers Say - 24th Apr 18
Chaos Capitalists Short Countries - How Chanos Got China Wrong - 24th Apr
Artificial Intelligence Defines the Political News Narrative - 24th Apr 18
Stock Market "Oops, They Did It Again" - 24th Apr 18
Fox in the Henhouse: Why Interest Rates Are Rising - 23rd Apr 18
Stocks and Bonds, This is Not a Market - 23rd Apr 18
Happy Anniversary Silver Investors! - 23rd Apr 18
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

Some Commodity Charts are Breaking Out

Commodities / Commodities Trading Dec 21, 2017 - 02:53 PM GMT

By: Rambus_Chartology

Commodities

Today I would like to update some charts for the commodities complex as we are starting to see some action in this sector. Back in the summer months when we first started to get long some of the different commodities sectors, we got many breakouts from some very nice H&S bases. After the initial move up came the first consolidation phase that has been going on for nearly four months or so. We are now starting to see some of these consolidation patterns breaking out which should lead to the next impulse move higher in most cases.

Lets start with BHP, one of the biggest miners on the planet, that shows a good example of where we are at in the bull market. Today the price action broke out with a gap above the top rail of an almost 5 month triangle consolidation pattern. A backtest to the top rail would come in around the 43.50 area.


Now lets look at a long term weekly chart which shows some classic Chartology. We have discussed many times in the past when you see a small consolidation pattern form just below an important trendline, in this case the neckline, and one above, that is usually a very bullish setup which BHP is now showing.

Also keep in mind the size of that double H&S bottom that took three years to buildout. Big patterns lead to big moves. The minimum price objective of that double H&S bottom is measured from the head straight up to the neckline # two. Add that distance to the breakout point to get your minimum price objective.

This monthly chart put the double H&S bottom in perspective.

Copper is an important commodity as it can show the strength or weakness of the economy which is why it’s called Dr. Copper. This weekly chart shows copper’s big H&S bottom with the breakout in the summer. The head formed a 7 point triangle reversal pattern which actually reversed the bear market. Here is a case where we didn’t see a backtest to the neckline when the breakout took place. The 30 week ema has done a good job of holding support so far during Coppers new bull market.

This 20 year monthly chart shows how the H&S fits into the very big picture.

Below is the quarterly chart which shows some nice Chartology especially that 24 year flat top triangle’s price objective.

I originally took two positions, one in July and one in August of this year for the COPX, Copper Miners etf, in anticipation of the eventual breakout above the neckline which so far hasn’t happened just yet. It’s close but no cigar.

This monthly chart shows a double H&S bottom which many of the different commodities are showing. The 12 month simple moving average has done a good job of showing support during the new bull market.

SCCO, Southern Copper, is the strongest stock in this sector. The daily chart below shows it has just broken out from a rectangle consolidation pattern with a breakout gap.

If big patterns lead to big moves then this weekly chart for SCCO says we should expect a very large impulse move higher as it’s trading at a new all time high after breaking out from a six year triangle consolidation pattern.

This 25 YEAR monthly chart below shows the breakout taking place above the six year triangle consolidation pattern which is now making new all time highs. Note the blue bullish rising wedge that formed as a halfway pattern back in the early 2000’s.

Some of the steel stocks are starting to show their pent-up bullishness as they are breaking out from major consolidation patterns. This monthly chart for NUE shows it broke out from its 9 year triangle consolidation pattern in 2016 and has been consolidating that breakout move by forming a second consolidation pattern just above the top rail which is the Red Bull flag.

This week SCHN is breaking out from a six year double H&S bottom. You would have to go all the way back to 2011 to equal today’s high.

This weekly chart for STLD shows it broke out from a one year bull flag three weeks ago.

This 20 year monthly chart shows the entire history for STLD. This chart also has some nice Chartology on it. Note the 2000 H&S bottom which launched STLD on its first bull market which produced several consolidation patterns along the way. When that bull market ended in 2008 it took 9 years to build out the massive triangle consolidation pattern which is now launching STLD on its next bull market leg higher. If you stand back and look at this chart from a distance you can almost see the beginnings of a parabolic move taking place.

Before I run out of time I would like to show you one of the weakest areas in the commodities complex which is $NATGAS. Last week it finally broke down from a year and a half H&S top. We now have a clean line in the sand, above the neckline is bullish and below is bearish.

Several weeks ago I tried to go long UNG as it was testing the bottom rail of an expanding triangle. After five touches of the bottom rail I thought it would hold one last time, but that wasn’t the case. After getting a decent pop off the last touch the price action reversed straight down and then gapped the bottom trendline where I exited the trade. Again UNG is bullish above the bottom rail and bearish below.

There are two patterns I’m keeping a close eye on for $WTIC. This first pattern is a rising flag formation which has just completed its fourth reversal point at the top rail. I would view the rising flag as a halfway pattern if the price action can take out the top rail.

As we’ve seen with some of the other commodity related stocks tonight many have formed a double H&S bottom reversal pattern. This 10 year daily chart for $WTIC shows it too has a double H&S pattern in play with a breakout above the neckline. The last time we looked at this chart I suggested it looked similarly inverse to that massive unbalanced H&S top, only on a smaller time frame.

This 20 year monthly chart shows how the double H&S bottom fits into the big picture.

This last chart for tonight is a 35 year quarterly chart which puts everything in perspective. Keep in mind the measured move for a H&S pattern when you look at this chart. Time to get this posted

All the best

Gary (for Rambus Chartology)

http://rambus1.com

FREE TRIAL - http://rambus1.com/?page_id=10

© 2017 Copyright Rambus- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rambus Chartology Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules