The Professor was one of the earliest to identify the Bull market in commodities. You can read about his amazing call from last month HERE.
Since then the price of commodities has continued to explode due to geopolitics and supply chain issues. The Professor has identified 2 more great setups in the commodities sector that look set to push higher.
AUY 4 Hour Chart
Trade Setup:
- Ascending Triangle on the 4 hour chart, showing a current breakout to the upside. From here, the bulls will likely take control and run the stock to the Fib Extension targets that are shown above
- TTM Squeeze has not fired yet, but momentum is growing. Any sign of green dots could ignite the momentum to the upside on this trade
- On balance Volume is showing positive values and a trend to the upside. This supports my bullish viewpoint on this trade as the underlying volume is supporting the direction right now.
My Trade Plan:
- Target $5.80
- Target $6.04
- Buy 1 APR $5.5 Calls
Fundamentals
Yamana Gold Inc., together with its subsidiaries, operates as a precious metal producer. It has gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina producer.
Historically, in times of geopolitical crisis gold has typically always been a safe haven, and a hedge against inflation. More recently, Bitcoin has taken the role of an inflation hedge for many investors. However, when push came to shove, the Russian invasion of Ukraine has shown that gold is still the safe haven in crisis, as it traded to all-time highs while Bitcoin crashed alongside high-growth tech stocks. There could be a multi-year bull run in gold on the cards, and AUY would be poised to benefit.
CAT 1 Hour Chart
Trade Setup:
- A bull flag is setting up here, and a massive one at that. If buyers can break above this resistance level, the measured move is putting the target near $233.
- TTM Squeeze: only 1 dot of red right now meaning the bulls have not taken full control. I want to see a green dot emerging after the breakout with positive momentum on the histogram.
- On Balance Volume: This is trending higher and currently positive telling me the underlying volume is bullish. With the buying pressure remaining strong, I want to see the bulls take control and surge the price towards the upward target.
My Trade Plan:
- Entry $225.02
- Target $233.04
- Buy 14 APR $220 Calls
Fundamentals
Caterpillar Inc. (CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide.
Given the commodities boom, mining companies are getting paid multi-year high prices for their products.
This should encourage them to mine as much minerals as possible to maximize profits for shareholders. This should lead to increased investment in mining equipment. Caterpillar (CAT) is poised to benefit significantly if a commodities supercycle can continue.
