Investcraft – The Art of Investing

I put my money where my mouth is and bought DBA, the agricultural commodity ETF which trades on the NYSE.  The index is  composed of futures contracts on some of the most liquid and widely traded agricultural commodities such as corn, wheat, soy beans and sugar.  I feel there is still some value left in these relative to the rest of the market.  I am worried about a general downturnin the markets as well, so we will see how this trade goes in a month or so.  With gold nearing $1000, there is a chance that it will take other commodities along for the ride and “lead” the way.  See my previous articles Two Powerful Investing Themes Part 1 and Part 2.

DBA has great support in and around the $24 area where I believe it should hold firm.  If it does not, I will be stopped out of this trade quickly but I will give it some room to breathe.  During the worst of the March downturn, DBA hardly budges and outperformed the overall market.  It has sinced lagged the market but I think it is time for it to catch up.  I like both its liquidity and stability, it should allow me to hold a larger position size for a longer time than usual. 

I’ve reprinted a chart courtesy of Barchart.com below which shows moving averages diving and converging and flattening out and clear support around $24.  That said, I won’t give it much room below $23.00.