Tuesday, May 26, 2009

Zignals Stock Charts: GLD, DBA, DBC and EURUSD

There has been considerable action in the quartet of commodities and EURUSD prices the past couple of weeks. Each are shaping up for even bigger moves, but how will they do?

First up is the Gold ETF, GLD. The initial call remains valid with the head-and-shoulder reversal pattern within a head-and-shoulder pattern. One could make a case for a short term reaction support at $90.14 which would allow for a breakeven stop on my May 6th call at $89.72. Miners have already begun the journey but it could be weeks before the base metal follow suit.

Maoxian has been following an Ag fund (DBA) and a more general commodity fund (DBC). DBA has emerged from an 8-month base and has room to move into the $33s.

The Commodity Index Tracking Fund (DBC) hasn't got the same juice powering it as the Ag-based DBA so it is still range bound. I have entered an anticipatory YourCall for a push to $27s with a stop on a loss of $21.

Currency fave EURUSD has been bubbling of late. A March call of mine didn't reap the reward I had looked for eventhough the direction of the move was correct. In the end the break of $1.3739 was the icing on the cake of a somewhat crude 'cup-and-handle'. Now it exists in a bit of a no-mans land between $1.3739 and $1.4141; the latter a beginning of a supply zone stretching into the $1.43s. The best outlook going forward is to have this backtest $1.3739 before an assault is launched on overhead supply.

As the indices work off overbought conditions into their traditional quiet season these aforementioned ETFs and currency pair may be the ones to watch over the next few weeks.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts, and stock charts website

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