Broad commodity index ETFs have gained more than 20% in less than two months… the definition of a bull market. And commodities could still move higher, they have not hit overbought levels yet. One commodity index with big gains, iShares S&P GSCI Commodity Index (NYSE: GSG), is shown in the chart below.

This is a bullish chart. In the past, the stochastic indicator has remained at overbought levels for weeks at a time after moving above 80. In a bullish move, the price of GSG has walked higher along the upper Bollinger Band for weeks. Right now, the stochastic has recently pushed above 80 and the price is still almost 5% below the upper band. Commodities may very well have additional gains ahead of them, and traders should consider the commodities as among the most promising sectors in this market.
 
Corn, soybeans and gasoline have all delivered big gains this summer, and it might be too late to get into those trades now. Gold and silver are getting attention as they look ready to break out of months-long trading ranges. If metals breakout, then this ETF that holds copper miners could move higher.

Global X Copper Miners (NYSE: COPX) has been in a trading range since the end of May with the top near $11.90 and the bottom of the range establishing support at about $10.35. The depth of the range can be added to the top to find a price target of $13.45, near the upper Bollinger Band. That should be at least a short-term resistance level and offers the potential for a 14% gain from recent prices. Longer term, there is resistance on the monthly chart near $15.50, giving this trade the potential to deliver a gain of about 30%.
 
The chart of copper itself makes an even more bullish case for copper miners. The monthly chart is show below and prices appear to be completing a double bottom pattern while stochastics are completing a bullish crossover.

#-ad_banner-#The chart pattern supports a 30% gain in copper, a metal that is likely to benefit from higher inflation and from a housing market recovery. Miners are usually considered to be leveraged trades on a metal. Many of the production costs at a mine are fixed and if the price of a metal rises, the company receives a higher price for the output without incurring significantly greater costs. This relationship tends to boost the gains of mining stocks relative to metals.
 
In addition to having a great chart, COPX is also undervalued. The stocks that make up the ETF have an average price-to-earnings (P/E) ratio of 8, well below the market average of 13 reported for stocks in the S&P 500 index. COPX provided investors with a yield of almost 5% in the past twelve months, making it an attractive income investment.
 
The final argument for this trade is the low level of risk involved. On the weekly chart, there is support at $10.35, and the daily chart of COPX offers an even smaller level of risk with support visible near the lower Bollinger Band at $10.75. That puts risk at about 8.3% on a trade with long-term potential of more than 30%.
 
Action to Take –> I recommend buying shares of COPX at a limit price of $11.80 with a stop-loss at $10.75.

This article originally appeared on TradingAuthority.com as This ETF Will  Be the Next Market Winner in the Commodity Bull market