By IntheMoneyStocks on May 18th, 2010 10:09am Eastern Time
This morning many commodity names are all trading sharply higher this morning. This impressive pop in the commodity names come as the U.S. Dollar Index declines and the Euro currency catches a bid higher today. Simply put when the dollar falls the commodity and inflationary stocks simply inflate.
Today most energy stocks, industrial metals stocks, and agriculture stocks are all moving higher after recently trading near lows for the year. Stocks such as Exxon Mobil Corp (NYSE:XOM) are rallying higher. Recently Exxon Mobil Corp has been at a new low for 2010. Exxon Mobil Corp is higher this morning by 0.92 cents to $64.19.
The Oil Services Holders Trust (NYSE:OIH) is a basket of oil services names that is trading higher this morning by 2.80 to 112.84. This ETF has also been near the low for the year and short term oversold. Therefore, a small bounce from here is likely on the daily chart. There will be resistance around the 115.50 – 116.00 area.
Southern Copper Corp (NYSE:SCCO) is a leading copper producer that is trading higher this morning by 0.54 to 28.02. This is another stock that has been oversold on the daily chart and near it's 2010 low. The stock has daily chart resistance at the 29.71 level.
When the U.S. Dollar is lower it will usually help inflate many of the beaten down commodity related stocks. Should the dollar reverse and trade higher it would be prudent to expect the commodity and inflationary stocks to come under pressure.
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