3 Ways to Trade a Rise in Timber Stocks

Sideways trends have started to dominate global financial markets. Chart patterns on the market leaders within some of the dominant sectors such as biotech and technology are being touted by many as proof that the days of trending markets are over. However, one segment that seems to be countering this thesis is the timber-related companies across the globe. In this article, we take a look at the charts and try to determine how active traders will position themselves to profit from the resumption of the powerful uptrend. (For more, see: Timber Investments Cut Down Portfolio Risk.)

iShares Global Timber & Forestry ETF

One of the most widely followed exchange-traded funds (ETFs) by retail investors seeking exposure to the global timber and forestry market is the iShares Global Timber & Forestry ETF. More specifically, as the name suggests, this fund comprises companies from around the world that produce forest products, agricultural products, and paper and packaging products. Fundamentally, the ETF has total net assets of nearly $550 million and an expense ratio of 0.51%. Taking a look at the chart, you can see that the price is trading a along a well-defined trendline and that it has behaved consistently on each attempted pullback. This is the type of behavior that active traders would expect to continue into the future, and many will likely look to protect their losses by placing stops below either $78.94 or the dotted trendline, depending on risk tolerance. (For further reading, see: Technical Indicators Suggest Opportunity for Forestry Stocks.)

 

Strong uptrends across the forest and timber markets suggest that this could be a group that deserves a place in your portfolio. …read more

Read more here: 3 Ways to Trade a Rise in Timber Stocks

Category: WOOD, CUT, WY

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