As I previously discussed, I am no longer bullish on the ag sector. As DBA shows, the ETF is showing a distribution pattern common among tops. This weekend I analyzed the sector in search of shorts and came up with three names that head my watchlist: TRA, DE and MON.
Common among these three stocks are broken trend lines, distribution patterns and poor relative strength compared to the sector.
Take a look at the six charts below:
Compare the five stock charts (TRA, DE, MON, CF and MOS) to the ETF DBA. Notice that TRA, DE and MON have broken either a major trend lone or moving average. They all show pronounced downside volume. Most importantly, they all started making lower highs prior to DBA’s recent pullback. Compare them to DE and MOS, which still look technically sound.
When shorting, I like to go with the laggards within a group. Therefore, when I decide to short the ag complex, I will likely do so with either TRA, DE or MON.