Jump to content

Lumber enjoys bumper week as the bulls return to the fold

Recommended Posts

Lumber has been hit hard over recent months, but this week’s outperformance looks to signal a bullish shift for the commodity

BG_LUMBER_361640647.jpgSource: Lumber
 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 08 July 2022 

Lumber has enjoyed a welcome boost this week, with the commodity currently the best performing asset amongst indices, FX and commodities. Unfortunately, bulls will know well that this is simply respite from a prolonged period of weakness. Nevertheless, we are seeing technical signs that we could be in for a period of strength. The weekly chart highlights how cyclical this market has been, with wide swings evident over the course of the past two-years. That consistency in each period allows for good intraday-to-medium term trading conditions. The recent two-week recovery comes off the back of a decline towards, but not below, the key $460 support level. A decline through that point would signal an end to the long-term uptrend in play. However, with price on the rise since the June low, there is a strong chance we have seen the bottom established here. One clue to support that theory is to look at the stochastic oscillator, with the line crossing back up through the 20 level following an extended period in oversold. Typically, a move out of oversold or overbought provides us with a good signal as it shows the tide is turning after an extended period of directional movement. The vertical lines and green arrows highlight how the past three occasions have brought about great buy signals for traders. Those three moves have averaged five-months of upside in the wake of a bullish stochastic breakout signal. On this occasion, the trend of lower highs does point towards a possibility that the rally could be shorter in nature.

LumberWeekly080722.PNGSource: ProRealTime

From a daily perspective, we have seen price rise up through trendline resistance to exit a descending channel. Notably, we have also seen price push up through the $714 resistance level, bringing an end to the trend of low highs. While the overbought stochastic could bring a near-term pullback once we see it drop below the 80 level, such a move would be viewed as a providing potential bullish entry opportunity.

Lumberdaily080722.PNGSource: ProRealTime
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 25/09/23 08:48
  • Posts

    • Zscaler Inc., Elliott Wave Technical Analysis Zscaler Inc., (ZS:NASDAQ): Daily Chart, 25 September 23 ZS Stock Market Analysis: We have been monitoring this stock as we were mainly looking for continuation higher after what seemed to be an initial move to the upside followed by a corrective downward move. At this stage the main scenarios are two. Either we just made wave (i) of {c} and we are looking to resume higher or else we’ve had a short wave {c} and we could be continuing lower.   ZS Elliott Wave Count: Wave (ii) of {c}. ZS Technical Indicators: 20EMA as support.   ZS Trading Strategy: Looking for longs into wave (iii). TradingLounge Analyst: Alessio Barretta Source : Tradinglounge.com get trial here!         Zscaler Inc., ZS: 4-hour Chart, 25 September 23 Zscaler Inc.,Elliott Wave Technical Analysis ZS Stock Market Analysis: Looking for a potential three wave move into wave (ii) to then have additional confirmation of upside resumption. We currently stand at the 50% retracement, with invalidation below wave (i).   ZS Elliott Wave count:  Wave (ii) of {c}. ZS Technical Indicators: Between averages. ZS Trading Strategy: Looking for longs after upside confirmation.
    • WD Gann Said over 100 years ago "When TIME & PRICE BALANCE, the trend HAS to change" . Yes, there is a definite maths relationship, Via Gann or Elliot-waves. The pity is I cannot get Gann Angles on IG as they are not properly defined as per Gann, and do NOT REMAIN FIXED AT THOSE ANGLES WHEN YOU CHANGE TO ANY TIMEFRAME!!!!!!!! Even the Gann fan angles, used by all brokers, are a joke. These angles are not set arbitrarily as the system allows, and no means to measure angles!!!!  
    • Making money through trading involves analyzing markets & making informed decisions. One buys assets at low prices & sells them high.To break it down, traders study charts, news, and economic indicators to spot potential opportunities. They use technical analysis to identify patterns and trends and fundamental analysis to assess the health of a market. Timing is key – traders aim to enter and exit positions at the right moments to maximize profit.Also, there are some tips on how to make money fast – they're out there, and they work. But remember, trading isn't a guaranteed shortcut to quick cash. It takes discipline, risk management, and continuous learning.
  • Create New...