In our Mentorship Facebook group we recently made a video about the run in base metal based stocks (3rd Dec). Since then the likes of Anglo American (below) have moved nicely inline with this underlying trend. There have been multiple signals with our own signature trading software, the Pro-Trading System (PTS), and some other ways to enter but once again the PTS is showing a new upside target.

It’s not only Anglo American that has seen big gains in the past year. Rio Tinto, Glencore and the US-listed Freeport McMoRan have all seen very impressive rallies in their stock market values. This is all due to the wider rise in the price of commodities coupled with the steadily weakening US dollar. Since the US Federal Reserve pumped the markets with printed cash, supply concerns and a seemingly insatiable Chinese demand have sent the prices of the likes of copper higher and higher. The Fed have since said that they will continue with their accommodation policy and have decided not to raise interest rates until US employment levels have improved dramatically. This also means that the US central bank might well tolerate an overshoot in inflation.

With the use of our Pro-Trading System and Momentum Trigger Strategy identifying entries to exploit these opportunities in the market becomes much easier. We monitor and track the trends as well as look for decent risk to reward set-ups, inline with the underlying market movements. Looking ahead to the rest of this (almost) brand new year, it seems like inflation may rise in the USA. The knock on effect of this could mean that the prices of commodities could continue to move in an upward trajectory and that the stock prices of these corporate key players continue trending.

The rise of the nascent electric vehicle (EV) market has also been essential in the creating the growth in the mining industry over the last 6 months. The producers of metals used in the batteries of these state of the art green automobiles, namely Zinc, Lithium and Aluminium, are all seeing solid gains in their stock value.

Below is a daily chart for zinc since August 2020. There has been a strong trend in this brittle metal during this time but this increase could be just as fragile as the asset itself; the trend in Zinc might not continue as well as the move in stocks as companies will inevitably mine more zinc as the demand continues to grow. This is why going for the mining companies might be a more prudent choice than trading the underlying asset itself. The trend in Zinc has been smooth with the price making higher highs and higher lows for some time. Just recently there has been a pullback in the trend and it might mean there could be another buying opportunity on the horizon but it would be wise to wait for a new Pro-Trading System signal before entering any trade for the commodity itself.

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