How To Profit In The Market Amidst Rising Consumer Prices
Michele Schneider | Jul 02, 2021 12:08AM ET
General Mills (NYSE:GIS) recently stated they would have to increase prices on many staple products.
This relates to recent price surges in fuel, packaging, and shipping costs.
Additionally, this has put a strain on not only food supply companies, but many small and large companies throughout the pandemic.
With the markets’ recent push to new highs in two of the major indices, has the constantly changing playing field opened new investment opportunities?
If so, which symbols and sectors offer the best reward?
Three areas we are currently watching are:
- Back to work/school trend
- Precious metals
- Soft commodities
The back-to-work trend builds off increasing demand for clothing and self-care products as more people re-enter the workforce.
For that reason, we are keeping an eye on L Brands (NYSE:LB) along with Estee Lauder (NYSE:EL).
EL is currently sitting near highs and needs to clear and hold over $318.34 for a successful breakout.
If EL is unable to breakout and moves lower, we can look for a pullback close to its next support level at $309 or the 50-day moving average at $303.
LB on the other hand made a successful breakout. For an active trade one could risk off the Wednesday’s low at 71.08 which is under the breakout level of 5/18 at $71.99.
Looking at precious metals such as gold (GLD) and silver (SLV), both have gone through recent selloffs and are now offering low entry points.
With GLD looking the strongest, each made a reversal pattern with 60+ day low on 6/29 followed by a close over the prior day’s range on 6/30.
The third space we are watching goes directly to the beginning of the supply chain.
Soft commodities such as sugar (CANE), corn (CORN), and soybeans (SOYB) to name a few are on our watchlist.
These offer a hedge against an inflationary period since no matter what unfolds next in the market, people will still need to eat.
With that said, we wish everyone a happy July 4 and a restful long weekend!
ETF Summary
S&P 500 (SPY) New highs. 425.46 support.
Russell 2000 (IWM) Main resistance at 234.
Dow (DIA) Next resistance level 348.60.
NASDAQ (QQQ) Holding near highs.
KRE (Regional Banks) 65.07 new support. 68 choppy area.
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SMH (Semiconductors) Like this to hold over 257.
IYT (Transportation) 257.67 new support.
IBB (Biotechnology) 159 support area.
XRT (Retail) 96.23 support.
Junk Bonds (JNK) 109.57 -109.65 support.
XLU (Utilities) 63.34 support area.
SLV (Silver) 23.75 key support.
VBK (Small Cap Growth ETF) 292.96 resistance level.
TLT (iShares 20+ Year Treasuries) 140 support. 146 resistance.
USD (Dollar) 92.41 looking to hold.
DBA (Agriculture) Did not have a bullish phase change over the 50-DMA at 18.52.
GLD (Gold Trust) 164 key support.
UNG (Natural Gas) 12.32 support from gap.
TAN (Solar Energy) 86.91 support.
USO (US Oil Fund) Support the 10-DMA 49.69.
XME (S&P Metals and Mining) 41.97 support
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