INDUSTRIAL METALS IN 2021

 

I think we have very good investment opportunities in industrial metals.

Which of these industrial metals ( $COPPER, $NICKEL, $ALUMINUM  $SILVER  ) is best to invest?

Commodities had a tough year and they may rise fast.

I do not think $GOLD will be part of this, though! 

• 1.Will Copper outdo the performance of other commodities in 2021?

According to a White & Case 2021 survey, yes!

 The demand for copper is rising as it is an essential metal in electric vehicles, also it is widely used in Green technologies. 

The Chinees economy is recovering fast which is one of the biggest consumers of industrial metals.

• 2. How Nickel will perform?

I call this the battery metal. Nickel prices reached an all-new high level in February this year before dropping down to under 16000USD levels. Considering overall market recovery and increasing demand for Nickel I expect this to rise as well.

• 3. Aluminum will rise steadily

The next one to follow is Aluminium. Looking at the aluminium importers like Germany, South Korea and the Netherlands make me feel more confident about the future of this metal. Now that importers' economies are recovering, I expect a steady price rise for this.

• 4. Silver will be affected by the vaccine performance!

If investment demand rises, the silver price will increase...

The biggest catalyst for $SILVER and $GOLD will be monetary dilution as these are precious metals and can not be produced by few clicks like Cryptocurrencies and there are many people who are still thinking and supporting the traditional safe havens. 

Happy trading!

Swing Index Indicator (SI)

1. Swing Index is used to compare a price movement to price swing 
2. The purpose is to defining the strength of price movement.
3. Positive SI reading can be a sign of a price up-move and negative SI readings considered as a sign of price down-move. 
4. Swing Index is based on the 2-bar data
5. I prefer to use SI on shorter time frames as it is only reliable to predict just several bars into the future. 

Signals:

• Buy signal: when the Swing Index crosses over zero. (Duration of trade only next few candles)
• Sell signal: when the Swing Index crosses below zero. ( Stay in trade or change SL after only a few candles)
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Stochastic Oscillator

 

A stochastic oscillator is a momentum indicator.

Trading Strategy:

• recognise the trend:
• In a trendy market only open position in the direction of trend.
• In a range market you can use both buy and sell signals.
• Upper band and lower band indicating different things in different market conditions:
• In a trendy market upper and lower bands show the momentum in the market for example in an uptrend if the indicator is above 80 it means that buyers have the momentum.
• In a range market, however upper and lower bands showing the overbought and over-sold areas. So, we may go long if we see oversold in a range market and go short if we see a over-bought situation. 
• Divergence is another important strategy to adopt when using stochastic indicator as a divergence may indicate a trend reversal.

Stochastic Momentum Index (SMI)

We can use this indicator to get the following information.

Overbought or Oversold: Above the overbought and below the oversold lines.

Trend: More oversold in compare to overbought indicates a downtrend.

More overbought in compare to oversold areas indicates a downtrend.

Trading Signals: Crossing the lines inside the extreme areas.

standard Deviation Indicator

Standard deviation is an indicator that measures the size of recent price movements of an asset, to determine the current volatility or predict how volatile the price may be in future. It can help you decide whether the volatility of the price is likely to increase or decrease as normally big price moves followed by small price moves and vice versa. Strategy: 1- Recognise the overall trend. 2- Look for the volatility with price movements against the overall trend. 3- Open a position in the direction of the trend after the high volatility happens.

Wealth Management Terms

1.  Rights Issue: https://g.co/kgs/SvDstx  Good to raise capital. A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro-rata way to raise capital.
2. Scrip Only Dividend: https://en.wikipedia.org/wiki/Scrip_issue The company issuing the scrip shares has now expanded the number of shares in existence, but not increased the value of the company
3. Open Offer: An open offer is a secondary market offering, similar to a rights issue. In an open offer, a shareholder is allowed to purchase stock at a price that is lower than the current market price. The purpose of such an offer is to raise cash for the company efficiently. https://www.investopedia.com/terms/o/openoffer.asp#:~:text=An%20open%20offer%20is%20a,cash%20for%20the%20company%20efficiently.
4. Closed-End: Organisations such as companies which are a fixed size as determined by their share capital. Commonly used to distinguish investments trusts (closed-end) from unit trusts and open-end investment companies (OEICs) (CISI glossary of terms)
5. Commercial Paper (CP):Unsecured bearer securities issued at a discount to par by PLCs with a full stock exchange listing. CP does not pay coupons but is redeemed at par.(CISI glossary of terms)