There are compelling signs that the commodity markets are becoming bullish in the longer-term, according to James Dima, technical analyst at Marex Spectron.
Dima says that while many commodity markets have seen upwards price action over the past two months, much of that strength was seen on the daily and shorter-term charts. However, over the past few weeks he has seen a shift suggesting that these markets should maintain an overall broad-based bullish stance over the next 6 months or more.
One example that Dima cites is Jet Fuel (see Chart). On this weekly chart, a positive close above the 50 week average occurred on 13 May – closing prices have not been above this level since June 2014 – and in another bullish move, the 20 day moving average crossed above the 200 day average on the 12 May.
Dima says conditions such as Jet Fuel have been confirmed on most commodity markets (aside from RBOB). He will now be looking for positive MACD crossovers on monthly charts on 31 May, concluding that ‘multiple bullish factors in three different time frames’ make a compelling bullish case.