The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By David Sterman
NEW YORK ( StreetAuthority) -- When it comes to commodities, there are two factors that dictate prices. The first factor is the underlying demand for the commodity, which can exceed or lag relative supply. The second factor is the technical picture, which is in focus for global investment-bank desks, which simply respond to the direction of a price of a commodity while paying little attention to the fundamental forces in place.
Right now, it's the latter factor ruling the markets. Many commodities are being dragged down by technical factors as losing sessions beget more losing sessions. As a result, silver, platinum and copper have all been sucked down, each trading more than one standard deviation below their 50-day moving average. On a technical basis, this "oversold" condition usually is a considered a "buy" signal. Come to think of it, the fundamental picture also means it's also time to buy. Let's take a closer look at silver, copper and platinum.
|There are several ways to play a rebound in copper.|
SilverMining firm Coeur D'Alene Mines Corporation ( CDE ) is always a solid play on silver when the metal is in an oversold state. I made a pair of suggested trades on this stock earlier this year. Back in January, I thought it looked undervalued at $22. But in April, I thought the stock had run too far too fast -- up to $35, and suggested profit-taking (or even possibly shorting the stock).
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV