Monday, September 7, 2015

DBA Agriculture Commodities ETF Weekly and Daily Charts Falling Wedges Oversold Positive Divergence Lower Band Violation

The DBA ag commodity ETF is indicating a basing process at hand and the positive divergence (green lines) on the weekly and daily charts indicate a potential rocket launch ahead. DBA has been crushed from about 30 to 20, -33%, in only 17 months. The daily chart is coming off of oversold levels. The stochastics on the weekly chart remains oversold. DBA bulls will need to see the positive MACD cross to confirm the upside ahead. Note both charts have violated their lower standard deviation bands so a move back to the middle band is in play; on the daily that is 21 and on the weekly 22.

Like all knife catches, price may bounce sideways a bit before taking off but DBA is a nice candidate for a potential jump higher. There are likely a lot of shorts in the ETF so if the upside can receive an initial nudge a short-covering rally may be quite strong. Keystone opened a long position in DBA on Friday and will likely ride it for a while probably adding if any further weakness occurs. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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