Multiyear uptrend in DBA forming
*This is for those that are interested in boring long-term trades.*
We might be setting up for a multi year bull run on agricultural commodities. In 2020, soybeans, corn and wheat saw massive gains. This rally might continu in 2021.
First of all a short article on the correlation between the USD and commodities: brownfieldagnews.com/news/weaker-dollar-bullish-for-u-s-ag-commodities/
DBA is the ETF that tracks agricultural commodities like I mentioned above. Looking at the weekly chart we have a massive downtrend starting from 2011 that looks to have come to an end now that we've broken the downtrendline. Zooming in a little bit more on the recent price action we can see a bullish divergence indicating we have started the Wave 1 of this uptrend. So a correction in the near future (Wave 2) could be used as an opportunity to scale in. Wave 2 is typically 50% to 61.8% of wave 1. These levels line up nice with recent support levels. Further downside movement (to 14) increases the risk of more downside.
To confirm the uptrend, DBA ideally should rally and close above +/- 17, either by continu to rally, or after a decent retracement.
We might be setting up for a multi year bull run on agricultural commodities. In 2020, soybeans, corn and wheat saw massive gains. This rally might continu in 2021.
First of all a short article on the correlation between the USD and commodities: brownfieldagnews.com/news/weaker-dollar-bullish-for-u-s-ag-commodities/
DBA is the ETF that tracks agricultural commodities like I mentioned above. Looking at the weekly chart we have a massive downtrend starting from 2011 that looks to have come to an end now that we've broken the downtrendline. Zooming in a little bit more on the recent price action we can see a bullish divergence indicating we have started the Wave 1 of this uptrend. So a correction in the near future (Wave 2) could be used as an opportunity to scale in. Wave 2 is typically 50% to 61.8% of wave 1. These levels line up nice with recent support levels. Further downside movement (to 14) increases the risk of more downside.
To confirm the uptrend, DBA ideally should rally and close above +/- 17, either by continu to rally, or after a decent retracement.
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