Tue. Jan 25th, 2022

Wood has been on a remarkable journey this year.

Up to 6 times last year’s lows, it fell rapidly to less than a double. What I find important to acknowledge is that the chart bounced back support to $ 440 and is now up $ 100 from this week’s low. Talk about trading ranks!

Based on the other strong bearish trends in the chart above, this is not the first cut competition. He goes with the business and goes fast. Add WTO tariffs and trade disputes and this is not a simple trade environment. But it is good in bullish trends.

A longer look at the wood makes it more appealing here.

For newer investors, the reason the chart is more compelling here is that the market typically historically exceeds that $ 500 level. For technicians, what was endurance becomes support. If you stay here and trade below the support, we can leave our positions with the stop relatively close.

Below is the chart of timber companies, compiled on the WOOD ETF. The volume is light, but it gives us an idea of ​​the trend. Right now, the $ 90 is a level of friction for this ETF.

Extending the day to day, the line of resistance is significant. It was the peak support and this is the third rally test. If it explodes, it is an input signal with a tight stop. While a narrow stop is always a good idea, the problem with this pattern is that a false leak can quickly lead to the end of the $ 84 range. If it does not come out, no entry.

While the wood chart is interesting here for an entry, futures traders usually exchange the merchandise. Merchandise-related companies can be traded individually or through the ETF. In this place of time, it is good to be looking at the wood to escape, recognizing the importance of a stop.

Greg Quick

About the author:
Greg Schnell, CMT, is a senior technical analyst at StockCharts.com specializing in intermarket analysis and commodities. He is also a co-author of Stock charts for mannequins (Wiley, 2018). Calgary-based Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and president of the Calgary CSTA chapter. He is an active member of the CMT Association and the International Federation of Technical Analysts (IFTA). Learn more

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