Trading ETFs That Hedge Against Rising Inflation

commodity etfs hedge against inflation trading charts analysis

The Producer Price Index (PPI) is accelerating at a quick pace with a 0.8% increase this November. For the year, producer prices are up 9.6%. 

As the media and market digest the increase in prices, the stagflation narrative becomes more realistic. 

With that said, this gives us more confirmation that commodities should be closely watched going into next year. 

Three trading ETFs we are monitoring are the Invesco Agricultural Fund (DBA) Invesco Water Res (PHO) and Teucrium Wheat (WEAT).

Currently, DBA has the least amount of resistance as it’s both over its 10-day moving average and its 50-day moving average at $19.52.

Additionally, DBAs 50-day moving average aligns with major support areas dating back to August making it an interesting pick if it continues to hold over $19.50.

Moving on to water, PHO is testing its 50-day moving average, and looks as though it will need more time to develop if unable to stay over $57.94.  

PHO also has resistance to clear at $60-61 before it can continue its upward trend.  

However, even with resistance to clear, droughts and irregular weather patterns makes PHO an interesting space to watch through the coming year. 

Then we have WEAT sitting under both the 10-DMA and 50-day moving average at $7.60.

Recently, WEAT created a head and shoulders chart pattern and is now leaning on support from the lower neck level as seen by the black line in the above chart. 

Once WEAT can clear $7.85 it will have broken through main resistance and can look to reclaim highs. 

One thing to note is that while these can be great picks alongside increasing inflation, our volatile market environment makes timing our entries key.  

Therefore, simply buying the correct symbol is only part of a successful trading strategy.

Watch Mish on TD Ameritrade with Nicole Petallides!

Stock Market ETFs Trading Analysis & Summary:

S&P 500 (SPY) 473.54 is the high to clear. 462.55 the 10-day moving average to hold at the moment. 

Russell 2000 (IWM) 212.71 needs to hold.

Dow Jones Industrials (DIA) 354.02 is price support. 

Nasdaq (QQQ) 385.23 is 50-day moving average to hold. 

KRE (Regional Banks) 67.93 is 200-day moving average and next support.

SMH (Semiconductors) needs to stay over 297.89.

IYT (Transportation) failed to get back over the 50-day moving average at 267.33.

IBB (Biotechnology) is trending lower.

XRT (Retail) is holding onto the low of its trading range. 

Twitter: @marketminute

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.

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