Basic Materials Industry
Monitor and predict the growth prospects and potential risks of the Basic Materials industry by examining the financial and macroeconomic factors affecting it and the latest Basic Materials news tracked by MacroVar. Sign Up Free to get notified instantly on the latest Basic Materials updates and get full access to MacroVar advanced analytics of Global Financial Markets, Economies and Financial Risk.
Click to explore the factors and the financial models used by MacroVar to analyze the Basic Materials industry trend, growth prospects and risks.
Basic Materials Industry Markets
|US Basic Materials industry||US.BASICMATERIALS||568.07||1||1||1.53757||61.9715||0.00597||0.0492||0.04528||0.12176|
|Europe Basic Materials industry||EU.BASICMATERIALS||1784.26||1||1||1.85651||65.6692||0.01482||0.02627||0.03937||0.34446|
|US Basic Materials Credit Spreads||US.BASICMATERIALS.CR||181.73||0.5||0.75||1.99507||41.7229||0.00187||-0.08411||0.00754||0.36117|
|Europe Basic Materials Credit Spreads||EU.BASICMATERIALS.CR||146.79||0||0.75||2.95433||59.4941||-0.00831||-0.03845||0.18637||0.63372|
Basic Materials Industry News
Basic Materials Industry Analysis
MacroVar monitors the performance, risk, trend and momentum of the Basic Materials industry by examining the stock and credit performance of major Basic Materials companies across the US, Europe, Eastern Europe and Asia Pacific. Basic Materials Stock performance is monitored by analyzing STOXX equity indices of major Basic Materials companies while Basic Materials credit performance is monitored by analyzing Markit iBoxx credit indices reflecting the performance of the Basic Materials high yield corporate bond market.
MacroVar also monitors fundamental indicators closely linked to the Basic Materials sector published monthly including analysis of sector specific PMI indicators, components of Manufacturing & Services PMI and Economic Sentiment Indicators analysis.
MacroVar also monitors other factors closely related to the Basic Materials industry like closely related financial markets or macroeconmic indicators.
MacroVar estimates the following signals:: Basic Materials momentum, Basic Materials trend, Basic Materials oscillator, Basic Materials RSI and Basic Materials returns.
Basic Materials description
The Basic Materials industry includes the economic sectors of Chemicals, Forestry & Paper, Industrial Metals & Mining and Mining.
The Chemicals sector includes the subsectors of Commodity Chemicals and Specialty Chemicals. The Commodity Chemicals subsector includes companies engaged in the production and distribution of simple chemical products that are primarily used to formulate more complex chemicals or products, including plastics and rubber in their raw form, fiberglass and synthetic fibers. The Specialty Chemicals subsector includes companies engaged in the production and distribution of finished chemicals for industries or end users, including dyes, cellular polymers, coatings, special plastics and other chemicals for specialized applications. Includes makers of colorings, flavors and fragrances, fertilizers, pesticides, chemicals used to make drugs, paint in its pigment form and glass in its unfinished form. Excludes producers of paint and glass products used for construction, which are classified under Building Materials & Fixtures.
The Forestry & Paper sector includes the subsectors of Forestry and Paper. The Forestry subsector includes companies engaged in owning and operation of timber tracts, forest tree nurseries and sawmills. Excludes providers of finished wood products such as wooden beams, which are classified under Building Materials & Fixtures. The Paper subsector includes companies engaged in production, conversion, trade and distribution of all grades of paper.
The Industrial Metals & Mining sector includes the subsectors of Aluminum, NonFerrous Metals, Iron & Steel. The Aluminum subsector includes companies engaged in mine or process bauxite or manufacture and distribute aluminum bars, rods and other products for use by other industries. The NonFerrous Metals subsector includes companies engaged in production and trade of metals and primary metal products other than iron, aluminum and steel. The Iron & Steel subsector includes companies engaged in the manufacturing and stockholding of primary iron and steel products such as pipes, wires, sheets and bars, encompassing all processes from smelting in blast furnaces to rolling mills and foundries.
The Mining sector includes the subsectors of Coal, Diamonds, General mining, Gold mining, Platinum & Precious metals. Each subsector includes companies engaged in the Companies engaged in the exploration for or mining of each mining product.
Basic Materials MomentumMomentum is used to capture moves in shorter timeframes than trends. Momentum is the relative change occurring in markets. Relative change is different to a trend. A long-term trend can be up but the short-term momentum of a specific market can be 0. If a market moves down and then moves up and then moves back down the net relative change in price is 0. That means momentum is 0. A short-term positive momentum, with a long-term downtrend results in markets with no momentum.
MacroVar Basic Materials momentum signal ranges from -100 to +100. The Basic Materials momentum signal is derived as the mean value from 4 calculations for the Basic Materials . The timeframes monitored are the following: 1 Day (1 trading day), 1 Week (5 trading days), 1 Month (20 trading days), 3 Months (60 trading days)
For each timeframe, the following calculations are performed: 1. Basic Materials return is calculated for the specific timeframe and 2. if the return calculated is higher than 0, signal value output is 1 else signal value is -1. Basic Materials momentum signal is the aggregate of the the 4 values. A technical momentum rollover is identified when Basic Materials momentum signal moves from positive to negative value or vice-versa.
Basic Materials trendBasic Materials trend signal ranges from -100 to +100. Basic Materials trend indicator is the mean value of the 8 calculations described below. The timeframes monitored are the following: 1-month (20 trading days), 3-months (60 trading days), 6-months (125 trading days), 1-year (250 trading days)
For each timeframe, the following calculations are performed: 1. Basic Materials Closing price vs Basic Materials moving average (MA) calculation: If Basic Materials is greater than Basic Materials MA value is +1, else -1, 2. Basic Materials Moving average slope calculation: if current Basic Materials moving average is higher than the previous MA, Basic Materials upward slope +1, else -1
Basic Materials trend model can be used as a trend strength indicator. Basic Materials trend strength values ranging between +75 and +100 or -75 and -100 show strong trend strength.
A technical trend rollover is identified when Basic Materials trend strength indicator moves from positive to negative value or vice-versa.
The most important trend indicator
The Basic Materials 52-week simple moving average and its slope are the most important indicators defining a market’s trend. Basic Materials is in an uptrend when Basic Materials price is higher than the 52-week moving average and the Basic Materials 52-week moving average has an upward slope. If fundamentals of the market have not changed and the moving average slope is still in uptrend, a price drop signifies a market correction and not a change of trend. Traders should watch oscillators like the Basic Materials oscillator and Basic Materials RSI to buy the dip and still follow the trend. The moving average slope turn signifies a change of trend.
Basic Materials oscillatorThe Basic Materials oscillator estimated by MacroVar is the z-score of the currentBasic Materials price versus Basic Materials 1-year simple moving average price. The formula for the Basic Materials oscillator is:
Basic Materials oscillator = (Current Price – 250 trading days Basic Materials simple moving average price) / (250 days Basic Materials price standard deviation)
Basic Materials oversold conditions
Basic Materials is oversold when it is subject to a persistent downward pressure due to extreme fund outflows. When the Basic Materials is oversold it is often due for a rebound. Values of the Basic Materials oscillator lower than -2.5 signify oversold conditions. It must be noted that the Basic Materials oscillator must be analyzed ibn conjunction with the rest ofBasic Materials quantitative factors. Traders should pay less attention to overbought or oversold conditions during strong trends. They should pay close attention during counter trends and all combined with the Basic Materials RSI.
Basic Materials overbought conditions
Basic Materials is overbought when it is subject to a persistent upward pressure due to extreme fund inflows. When the Basic Materials is overbought it is often due for a correction. Values of the Basic Materials oscillator higher than +2.5 signify overbought conditions. It must be noted that the MacroVar oscillator must be compared to the rest of the Basic Materials quantitative factors. Traders should pay less attention to overbought or oversold conditions during strong trends. They should pay close attention during counter trends and all combined with the RSI.
Basic Materials RSI indicatorThe RSI indicator measures the speed and change of price movements. The RSI indicator oscillates between 0 and 100. RSI is a useful indicator during normal trending market conditions when an asset price oscillates around its trend value. During big moves and strong trends however, like short squeezes or price spikes RSI and other oscillators don’t work.
During normal trend market conditions and when Basic Materials is in a downtrend RSI values between 50-60 signify overbought conditions before the downtrend is ready to resume. DuringBasic Materials uptrend, RSI values of 40 to 50 signify oversold conditions before the uptrend is ready to resume. It is strongly not recommended to enter a position when the RSI is “overbought” and falling or vice versa.
Basic Materials returnsMacroVar calculates Basic Materials returns for the following timeframes: Daily, Weekly, Monthly, Yearly. The formula for calculating returns is:
Basic Materials returns = (Basic Materials Closing Price – Basic Materials Previous Price)/(Basic Materials Previous Price)