Industrial metals have had a stellar year-to-date, boosted by Chinese data indicating that the world’s second-largest economy is still growing at a gradual pace as well as an increasingly positive global growth story. Let’s have a look at the current technical standing for these commodities:
#1. Zinc Futures
After trading within an 8-year consolidation range, the metal gave a bullish break during October 2016 which saw the price rally from $2360 to last week’s close of $3215, While the price has made higher highs, the RSI’s negative divergence now signals the potential for the price to retreat. Support to the downside comes in at: i. $2960, ii. $2725 and iii. $2505
#2. Copper Futures
The metal remains in a strong upward trend after a breakout seen in January 2017. The first level of resistance at 6353 has been cleared, followed by a re-test and continuation of the bullish move. The next level of resistance coming into play comes in at 7395, although we may see a short-term pullback as the Relative Strength Index (RSI) is signaling a small bearish divergence.
#3. Aluminum Futures
Last week’s candle showed the price giving a sharp bearish reversal from the 2192 resistance level. The price has been in a very strong upward trend throughout 2016 to present, appreciating from $1430 to the last close of $2105 with the price still trading above a rising 50-week moving average. The Relative Strength Index (RSI) also showed a sharp downward move as well as bearish divergence while the next level of support comes into play at $1795.
#4. Nickel Futures
The price has started to break to the upside of a base that has been building for the past two years. The price, which last week closed at 12097 has appreciated nearly 40% over the last 5 months however now faces downward trend line resistance from swing highs of February 2011 as well as May and September 2014.
I bailed out of my DSTV subscription about a year ago in protest of what I consider to be the unjustifiable cost. I can only speak for myself here but I don’t think any subscriber gets value for money regardless of how many channels they offer. But of course, that is just my own opinion. I have opted rather, for the internet entertainment option. Call me cheap if you want, but this is becoming a growing trend and after doing some of my own homework, I feel better knowing I am not the only one.
While I am aware that our pay t.v provider has a monopoly right now and we most certainly are not blessed with “multi-choices” here, the customer exit trend is real. This is most evident in the United States.
Investors in traditional TV providers are reeling. AT&T, whose ownership of the DirecTV satellite service makes it the biggest U.S. pay-t.v provider, reported last week that it expects a third-quarter loss of 390 000 subscribers. That’s just one quarter! Three months!
Other providers like Comcast Corp. and Viacom are also failing to stop the desertion of their customers that have been lured away by the cheaper entertainment options such as Netflix and Snapchat. In fact
Now I know we aren’t exactly spoiled for choice here when it comes to pay-t.v providers but with my investor cap on I did notice a scary little coincidence when I looked into the US Media Index. AT&T, Dish Network Inc., and others are offering cheaper, online-only versions of cable to lure customers back. Sound familiar?
The industry is dying
After decades of steadily increasing bills and ever-bigger packages of channels, the pay-t.v ecosystem in the United States is in full-blown crisis mode. Last week was probably the first signal (in my mind) that the industry is dying. Barring a major fourth-quarter comeback, 2017 is on course to be the worst year for conventional pay-tv subscriber losses in history.
Needless to say, shares in these stocks are getting “klapped”, shares in internet entertainment, however, are going the other way.
By no means am I writing this column to convince you to cancel your DSTV subscription but rather to point out from an investment point of view where opportunities lay. These providers will have to come up with innovative ways to keep up with demand. Who knows, maybe they will. My point is, a simple price boycott from my side led me to investigate the longevity of an investable industry. if It turns out that am the only cheap-skate in the world then so be it. I like getting value for money. Not only for the goods and services I spend it on but also, in the things I invest in.
Think like an investor
A simple gripe has not only opened my eyes to new investment opportunities but also which investments to avoid. As an investor, I can visualise the money flowing out of pay tv to guys like Netflix, Showmax and Snapchat. In short, welcome to the tech era.
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