mdolan: Unfortunately technicians cannot foreast or predict final support levels but if you look at charts and donchian channels, then you can see the daily and weekly price supports. The ag/commodity etf's and USO/OIH, etc for oil, can be good proxy's for the sectors. One fairly good proxy for fert majors is POT, the leader of the group, and it has not broken down badly yet as the fert sector remains the top one LT, so one way to play that sector is to wait for a breakdown and extremely oversold condition and a strong bullish reversal before buying in. Ags in general is a wider group than ferts and one can look at Agrium and Monsanto and etf's.
Oils & natgas could see more weakness in the ST as well as ags/ferts, with crude looking like it could find support near 120, but geopolitical events could affect that up or down. By view is that crude remains in a secular bull market due to mostly fundamentals of supply/demand, with speculation causing ST moves as well. I believe there will not be sustained demand destruction this year or next, large enough to cause a bear market in oil, and that pullbacks with daily stochastics below 25% and consolidation patterns at lower prices of good quality oil stocks will be buying opportunities.
The major ferts, such as POT MOS CF, will eventually make new ATH's, after their corrections, imho, and it won't take very long.
I like major ferts and high growth oil stocks, and believe both will rally strongly from their bottoms (in July, perhaps) over the next few months and beyond.
If the market has either a selling climax or successful double bottom in the days or few weeks ahead, then it may indeed provide a very good buying opportunity for these two sectors.
jmho,
drbob |
