Action:
The trend in commodities is up in the long term. This trend has also accelerated in the last 2 months, along with the market (the green channel). IYM/UYM are near the top end of their channels. The stochs show overbought and turning around. RSI is at the precipice of a fall. SMN the counterpart has been heavily beaten down. It could happen that these fall with the overall market. (?)
This is a nice area to scale into SMN, if you own Ag stocks.
Guess:
We are betting on about a 10% correction on IYM/UYM. Thus the play on SMN, we will tighten stops on SMN around 30-31, once it gets there. We hope that the green channel is broken and IYM retraces into the lower reaches of the black channel. This would also provide a nice entry point into Ag names such as POT, MON, CF and others like CALM, VCP, MTL etc.
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