GOLDMAN SACHS COMMODITY INDEX

What would China’s easing mean for commodities? Higher prices? How would the Commodity Index perform if Crude oil breaks above $104 levels? I believe the positive technical outlook on the commodity index is mainly driven by these two factors that investors are currently anticipating. Of course we still haven’t seen a confirmed breakout from the possible inverted Head & Shoulder pattern but if we were to say few words on this chart, it is bullish.

Neckline or in other words the most important resistance is at 675 levels and a breach above this level will be positive for the commodities. In this study I used the 200 day simple moving average  because in the past one year it has been a better fit when compared with the 200 day exponential moving average. Also the level it is standing at (675) is critical resistance for the inverted H&S pattern neckline. It stresses the importance of 675 level on this chart. Please note that a breakout above 675 will be the first “higher high” since March 2011.