Is This Inflation ETF Breaking Out?

As long as inflation continues to surge, so should the Invesco DB Commodity Index Tracking Fund ETF 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.

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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.

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Photo: Zenzen via Shutterstock