Riding the Commodity Bull: 3 Stocks Poised for a Breakout

Ladies and gentlemen, gather ’round! It’s time to get your investing game on point, because we could be about to enter a commodity super cycle that’s going to make your portfolios soar like a rocket ship to the moon. And no, I’m not just talking about the price of avocado toast. I’m talking about the real deal: commodities that people actually need to live, like oil, copper, and wheat.

You see, governments around the world have been making some questionable decisions lately (to put it mildly), and their bad policies have led to a shortage of these essential commodities. But don’t worry, this isn’t a dystopian nightmare – it’s an opportunity! Because when there’s a shortage of something, the price goes up. And that’s where you come in.

Now, I know what you’re thinking. “But wait, isn’t ESG investing all the rage these days? Won’t that drive down the price of commodities?” Well, my dear friend, that’s exactly what’s happening. Investors are so busy trying to save the world that they’re neglecting the basic laws of supply and demand. But don’t worry, we’re not going to make that mistake. We’re going to focus on the stocks that are poised for a breakout and ride this commodity bull market all the way to the bank.

So sit back, relax, and get ready to learn about the three commodity stocks that are poised to breakout. And remember, this isn’t your average “buy low, sell high” advice. This actually isn’t advice at all. I’m just a dude drawing lines on charts, I don’t know what the heck will happen, but if these charts breakout they suggest deploying a momentum-based strategy where one looks to “buy high, sell higher”. Let’s get rich, people!

Canadian Natural Resources (TSX:CNQ)

Canadian Natural Resources is forming a giant multi-month continuation pattern below new highs, with the upper trendline as the resistance level. The PPO momentum indicator is rising above the zero line, indicating a positive momentum shift. Keep this chart on a watchlist and monitor for a breakout. Breakouts from a prolonged consolidation period tend to be powerful as the stock has accumulated energy and once it breaks out, it’s likely to move higher in the breakout direction.

Franco-Nevada (TSX:FNV)

Franco-Nevada is setting up near the apex of a giant multi-year consolidation/continuation pattern as the monthly PPO momentum indicator threatens to perform a bullish cross. As previously mentioned, breakouts from this chart configuration can lead to a powerful move in upward price momentum. So, keep an eye out for a breakout, as this is the type of asymmetry I like to look for. Breakouts to new all-time highs have no resistance from investors selling to cut their losses, in theory, everyone is a winner, which can lead to an acceleration of upward price momentum upon breakout.

Ivanhoe Mines (TSX:IVN)

Ivanhoe Mines continues to appear on momentum scans. Price action threatens to break out to a new all-time high, while the RS line (Relative Strength vs. S&P500) starts to push to a multi-year breakout. When the RS line breaks out, it signals outperformance versus the benchmark that most fund managers try to beat, which often leads to an inflow of money into such stocks. This increases the probability of a breakout. In addition, the stock has the characteristics of a high upside potential with limited downside risk when using a proper stop-loss order, which is what I am looking for in my momentum based strategy. Keep an eye on the chart of Ivanhoe Mines and monitor for a breakout, which could lead to an acceleration of upward price momentum.

And if you liked this blog post, share it with a friend! Or don’t, we don’t really care. But either way, keep in mind that while ESG investors may be saving the world, we’ll be saving our bank accounts.

To learn more about chart patterns and the momentum-based strategy, visit our education section by clicking HERE.

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