Rotation is in full swing. 

We just saw a massive rally in software stocks. After many wrote off the industry for dead, the group came storming back.

The iShares Expanded Tech-Software Sector ETF (IGV) spiked 8% last week.

But the question is: Where does the money flow next?

One area I have my sights set on is commodities. 

This chart shows the performance of the Materials Select Sector SPDR Fund (XLB). This fund invests in a variety of basic materials stocks—including everything from gold and steel to chemical companies. 

We can see that XLB is on the verge of breaking out of a downtrend it’s been in since February. A successful breakout would ignite the next major leg up for the group. 

Within the space, I’m a particular fan of copper stocks. 

Unlike gold and silver, copper has recently broken out to new all-time highs. This, as you can imagine, is good news for copper mining stocks.

The Global X Copper Miners ETF (COPX) is starting to price this in. It’s on the move higher this week, and only a few sessions away from a big breakout.

We’re already seeing some leading copper names break out to new highs.

Take Hudbay Minerals (HBM), which is coming off its highest weekly close ever. It’s now starting to climb out of a more than two-decade-old base!

Freeport-McMoRan (FCX) is also on the cusp of a big breakout. 

Bottom line: Rotation is a trader’s best friend—if you know where to look next.

Software had its moment. Now the money is moving into commodities, and copper is leading the charge. The setups forming in HBM and FCX are as clean as anything I’ve seen all year.

I’ll be watching closely for those breakouts.

And speaking of rotation—yesterday in Express Trader, we closed out of Dell Technologies (DELL) for a 135% gain. That’s what happens when you catch a stock trading in the right sector at the right time and let it run.

If you want to see what I’m turning my attention toward next, consider joining us in Express Trader to get my three strongest trades every week.

If you’ve been on the fence about joining, today’s the day. New subscribers can get in at 41% off the normal price, but only until midnight. To see if this offer is right for you, click here.

Justin Spittler

Director of Trading, RiskHedge