DBC is a rules-based index composed of futures contracts on six of the most heavily-traded and important physical commodities in the world: crude oil, heating oil, gold, aluminum, corn and wheat (more information at: http://www.dbfunds.db.com/dbc/index.aspx).
What can we learn from the chart analysis of this commodity index ETF?
1) A much higher volume of transactions over the last month: denotes stronger interest from investors.
2) A bullish divergence between the price and the MACD (Moving Average Convergence Divergence): the price has been decreasing since mid-2008 whereas the MACD lines moved higher since November 2008. It is a signal that a trend reversal is happening.
3) The 50 day moving average was acting as a resistance since July 2008. Now that the price crossed this moving average to the upside mid-March, it is acting as a support.
Conclusion? I buy at 21$ and plan to hold it as a long-term investment.
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