As we scan the market looking for meaningful moves that could eventually lead to important trends, we noticed the following: Commodities in general are in a sideways pattern, most are consolidating before the next big move. For some the consolidation lasted for a long to a very long period of time, which makes us think that 2018 could see the birth of important Bull markets for some select commodities. The opposite could be an outcome as well.
During the scan, we noticed the following sectors seem to be showing early signs of strength. Therefore, we believe investors should have the following commodities in their watchlist for the Top commodities in Spring 2018. We will cover below why.
The Energy Sector, Crude Oil in particular
3 weeks ago, crude oil retraced sharply and bearish outlooks were all over the news. During that retrace, we published the following in our Crude oil price falling, Bearish?:
In fact, as long as Crude oil trades above 52USD, it is still Bullish and will likely head upwards. If it breaks below 50 USD, it would be bearish and we could see the price drop towards the bottom of the channel where there is a mega support area at 40 USD.
What we see in the below chart, is how that retrace was a perfect backtest of the ascending trendline, the support held and we see Crude oil showing strength. We expect Crude oil to be in an upwards trend in 2018 with retraces along the way.
Gold and Silver: An Absolute Must in Investors’ Watchlists
We have written extensively about Gold and Silver. The chart set up for both shows that there is a big move in the works. We believe that if Gold breaks out to the upside, it will be an important move as shown by the chart below. Important price levels for Gold could be found here. A must read for Silver, including 3 important charts and price levels for silver can be read here.
The Agricultural Sector Could be a Strong Performer in 2018
The agricultural sector is definitely another sector to watch. We saw what looked like a Breakout in the sector happen almost a month Ago and we covered it in our article here. However, we need confirmation and the upcoming weeks will provide that confirmation: If the 280 support holds, we are likely to see the continuation of the upwards move. If the 280 support fails, it means the price will return into the descending channel.
That’s why investors want to keep an eye on this chart in particular as the next move be it to the upside or the downside will be significant and fast. We favor the upside scenario given the strength of the base. However, caution is of the essence given the length of the descending channel (since 2010)..