This agricultural trade is bottoming with more upside likely ahead, according to the charts
Agricultural commodities like corn, soybeans, and wheat have seen intermediate-term momentum improve to suggest their counter-trend rallies have room for more upside over the next several weeks. A broader commodity bull cycle in place is carrying over to former laggards like natural gas and the agricultural commodities. When agricultural commodities are performing well, stocks with exposure to them tend to garner interest. One ETF that offers exposure to this space is the VanEck Agribusiness ETF (MOO) , which is comprised of 50 stocks in the business of agriculture, with the largest holding being Deere & Co. (DE) . From a long-term perspective, MOO remains within a cyclical bear trend per declining trend-following metrics like the 12-month moving average and weekly cloud model. However, the downtrend has stalled above key support near $69, which is defined by former resistance from the 2020 high. This would be a natural place (on the charts) for a bottoming process to occur for MOO. To us, a basing phase already appears to be underway, noting the monthly stochastics are emerging higher from deep oversold territory, and the monthly MACD shows a more notable loss of long-term downside momentum. When zooming in on the weekly chart of MOO, a compelling divergence has formed over the past few months in the weekly MACD to suggest that a bigger counter-trend rally can unfold: The 200-day, or 40-week, moving average is nearby as resistance, but we think it is surmountable for a test of more important resistance at the weekly cloud, which ranges from roughly $78 to $82. In our Fairlead Strategies Idea Generator , we recently featured a related ETF as a long idea, the Teucrium Wheat Fund (WEAT) , which also appears to have a long-term bottoming process underway, albeit appearing overstretched in the near term. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . 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