So far, 2017 has proven to be a year that rewards commodity traders who have chosen to trade selectively in certain segments such as precious metals over the past several weeks. It probably comes as little surprise that the broad market has been dominated by sideways momentum, and many groups such as the softs have been dominated by the bears. However, based on the charts discussed in this article, it appears as though the broad commodities market is now in the early stages of breaking higher. The final months of 2017 could be the best opportunity of the year for adding broad commodity exposure.
PowerShares DB Commodity Index Tracking Fund (DBC PwrShs DB Cmdty Idx Shs PowerShares DB Commodity Index Tracking Fund DBC 15.16 +0.27%)
There are thousands of chart patterns and indicators that are used by active traders for determining the future direction of a market. One of the most reliable and sought-out patterns is the inverse head-and-shoulders pattern, which is a reversal pattern that is generally used to identify major reversals in downtrends. The break above the neckline, such as the one shown on the chart of DBC, is the signal that traders use as confirmation that the trend has reversed and is likely to head higher.
As you can see from the chart, the recent bounce off of the 50-day moving average was strong enough for the bulls to establish control, and the recent move above the combined resistance of the 200-day moving average and neckline suggests that the final months of 2017 could be the time to invest in commodities. Target prices will likely be set around $16.50, which is equal to the entry point plus the height of the pattern. (For more, see: Commodity Traders Gearing Up for a Long-Term Move Higher.)
Given bullish chart patterns and clear trading signals, the final months of 2017 could be prime time to buy commodities. …read more
Read more here: 3 Charts Suggesting It Is Time to Buy Commodities