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Soybean Trade Technical Analysis - Soybean Trade Trading: 2017-04-07
Continued rains are bullish for soybeans prices
Wet weather in southern Argentine may delay soybean harvest and negatively affect crops. Will soybean prices continue the decline?
Wet weather in Argentine may delay soybean harvest, supporting soybeans prices. Across the country, only 2% of soybean crops have been harvested compared to about 8% a year ago, according to the Buenos Aires Grain Exchange. The weather forecast predicts more rains in the near future, threatening to result in flooding similar to last season’s flooding which negatively impacted Argentine’s soybean output. Continued rains will be bullish for soybeans prices.
On the daily timeframe SOYB: D1 has been trading with negative bias after retracing to ten-month high in mid-January. The price is below 50-day and 200-day moving averages MA(50) and MA(200), and a death cross pattern of moving averages has formed: the MA(50) has breached below the MA(200).
- The Donchian channel is tilted downward indicating downtrend.
- The Parabolic indicator has formed a sell signal.
- The MACD indicator is neutral.
- The stochastic oscillator is rising from the oversold zone.
We believe the bearish momentum will continue after the price closes below lower boundary of Donchian channel at 942.7, confirmed also by the last fractal low. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the Parabolic signal at 961.1. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (961.1) without reaching the order (942.7), we recommend cancelling the position: the market has undergone internal changes which were not taken into account.
Technical Analysis Summary
| Position | Sell |
| Sell stop | Below 942.7 |
| Stop loss | Above 961.1 |
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