Friday, June 27, 2008

DBA - Double Top or Break-Out?


Floods, famine, inflation, extreme weather and market moving crop reports, DBA is an ETF investing in corn, wheat, soybean and sugar futures.  The problem with buying it here the is the danger of a double top just above current levels. But, slicing up through that resistance line would be a heads-up to buy the January 2009 65 calls, currently at 30 cents.  Can this stock move 50% in six months?  Last June in ran from 25 to 38, or about 50%, in six months and that was before the inflation and floods that are looming this summer. What happens to those calls if it does run like that again? $1.00 to $2.00 seems likely along the way up.  Of course the options can be eschewed in favor of the stock, but, what fun is that?

A


9 comments:

abot said...

ATW bo? buyout candidate for slb, rig , baker hughes?

Anar said...

The only problem I see (weekly chart) with ATW is that even though it is breaking out in price to an all time high with great volume, the MACD and RSI are not at an all time high... Negative Divergence.

Any thoughts?

-AM

Allan said...

Anar, yes ATW is looking good on both the daily and weekly charts and I wouldn't let a non-confirmation or two overrule a b/o.

A

Anonymous said...

Allan, you are UNREAL!!! Another Winner with BPG!!!

Mike said...

Rode DBA on the way up...a little while back.

Speaking of ETFs...USO ain't too bad a pick either.

-Mike

Mike said...

But DBA in the 40 range is a much finer pick that USO in the 113 range...gotta love that percentage leverage of lesser priced equities.

Anonymous said...

Allan:

Which charting program are you using
to generate these graphs?

John Kercheval

Allan said...

Which charting program are you using
to generate these graphs?





http://stockcharts.com/index.html

Anonymous said...

Made a little money on the July calls for DBA....sold for small profit...I needed to take one just to feel better about myself... I own Jan. 09 55 calls on DBA..counting on a run up once it breaks out... I am in a little early, I know.

Cruiseguy...