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Lumber and Orange Juice - Still some wood to burn and juice in the tank!

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I have posted in the past about Lumber and Orange Juice. Both are not your sexy conventional commodities to trade. However, both have performed rather well compared to other commodities. Orange Juice is extremely volatile but Lumber could be set for its next leg up by looking at the charts. The technicals seem to suggest that it will certainly have a go but there could be plenty of profit taking before Christmas so one needs to be very careful.

 

With trend following it does not matter what you trade or invest in. It does not matter which commodity it is. It is all about price action and volume. There may well be some fundamental analysis that can be carried out to explain the behaviour and there can be some technical analysis which supports the reason behind trading or investing. Ultimately its about spotting the correct trend at the correct time. 

 

It is about assessing the price action against say 20 day MA, 50 day MA and even 200 day MA to identify the strength of the trend and also time horizon of the trend. It is all about the tape as Jesse Livermore I am sure would agree if he was alive. He was one of the best tape readers around in his era. 

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Lumber is looking interesting at the moment.

 

There seems to be support around the $41428 area.

 

It finished with a buy price of ($45310) and sell price of (45250). 

 

Florida has certainly paid a part to the build up but I think that Canada will play a part in how this plays out going forward.

 

https://www.woodbusiness.ca/industry-news/markets/2018-lumber-outlook-4684

 

I am thinking of a price target around the magical $50000. I would strongly recommend a stop loss of around $42685 or thereabouts. I am only presenting a potential trading idea for anyone who does not already have a position in Lumber. If Lumber continues to go up and towards $50000 then think about a trailing stop but if the trend reverses and then make sure you are out by your stop loss being executed.

 

Until Lumber crosses $46000, this is still tricky but if it does then I would suggest it is a good opportunity to go long.

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Orange Juice looks interesting right now by looking at the chart. There is extreme weather condition possibilities in Florida and already if reports are to be believed then the freezing conditions have damaged some of the orange crop. 

 

I shall be keeping a close eye on Orange Juice. This is where 'Fundamental meets Technical'. 

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Orange Juice is looking like it is potentially breaking out. A key part of my strategy is to try and identify potential trends that I may wish to consider trading. 

There is a lot of downside already priced into Orange Juice which is something that I do like to see if at all possible. It is not always the case. Of course there could be more downside but time will tell.

Right now it is important to monitor closely the price action of Orange Juice. There is no doubt that the long term trend is firmly down. However it has gone above its 20 and 50 DMA's. This is enough for me to start getting interested on the long side. 

There are times when I try and get in early as I can. The 100 DMA will be a key price point. Potential Trending Opportunities (PTO's) are key to any trend following strategy. 

 

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2103411128_NYOrangeJuice_20190315_05_26.png.555041bad39e369102dd06173d63f8cf.png

Using the Parabolic SAR once can try and identify direction changes in trends. The chart below will illustrate this point. Any dots below the price is a bullish signal and any dots above tends to indicate bearish potential. 

654563890_NYOrangeJuice_20190315_05_28.png.63585a77c893652af86f0151b1b1a30d.png

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Orange Juice is continuing its move upwards.

527473966_NYOrangeJuice_20190318_20_19.png.a6dde12a06c95e74355484245b872448.png

Sometimes the best trends can be those that are entered early, once certain parameters are met. It is those that the media have not commented or reported upon. Usually once the media start getting involved then the bulk of the trend has already passed! 😀

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The current price for Orange Juice is $12904 at the time of writing this post. 

It is trading above its 20, 50 and 100 DMA with the 20 and 50 DMA curves beginning to slope upwards which can be perceived as a bullish indicator. Of course this does not guarantee any continued upward movement but can be used in any 'decision making basket' along with other indicators and information to help make an informed trading decision. 

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