Is This Inflation ETF Breaking Out?

As long as inflation continues to surge, so should the Invesco DB Commodity Index Tracking Fund ETF NYSE:DBC. It had gained about 40% this year and appears to be breaking out.

When an ETF trades above a resistance level, traders say it has "broken out." This could have bullish implications.

A resistance level is a large group or concentration of sellers gathered around the same price. As you can see on the below chart, in this case, it was $28.50.

Sellers kept a top on the price of DBC at this important level since March, but now the shares are higher. This could illustrate the investors who created the resistance are gone.

With this large amount of supply out of the way, buyers will be forced to pay higher prices to acquire shares. This could force DBC into a new uptrend.

To learn more about trading, check out the Benzinga Trading School.

 

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Photo: Zenzen via Shutterstock

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