Time to buy commodities and rotate sectors

By Emerging Money>,

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With China cutting its bank reserve requirements  and lenders ready to rush into the markets with new money, we're due for a sector rotation. Get ready to buy commodities, and keep a lookout for the ripple effects that come with demand for agriculture and metals.

Here's a case in point. Israel Chemicals Ltd. ( ISCHY , quote ), extracts minerals from the Dead Sea to make fertilizer and potash. Bloomberg reported last week that ISCHY has been on its biggest bull run in two weeks.

The reason for the gain? Speculation that price rises in corn and wheat will fuel demand for fertilizers.

"ICL is rising because the price of corn, wheat and soy rose last week," Psagot Investment House analyst Ilanit Sherf said. "The price rises indicate that farmers will be willing to buy more fertilizers and pay more for them."

Shares of Israel Corp. -- which holds a 52% stake in Israel Chemicals according to data compiled by Bloomberg -- have also been surging, proving that sometimes even the ripple effects have ripples.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
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