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Technical Analysis #C-SOYB : 2015-05-06

Soybean trying to rise

Today we examine the chart of soybeans CFD or SOYB. The price has tumbled almost 40% over a year and is located now in a range. We don’t rule out the possibility of rising soybean prices due to the following reasons: weak macroeconomic statistics drags down the US dollar (SOYB is quoted in USD). Recently there has been an increased demand for US soybeans in China. In Argentina there is a strike of farm workers, demanding raising wages by 45% as the inflation rate is expected to be 30% this year. In the meantime, this country has been ranked the first one in the exports of soybean oil, which is used for biofuel and fodder production. Argentina is the third largest country in the world in soybean exports. Note that market participants expect soybean prices to retrace after the strike is over. Soybean crop in Argentina in 2014/2015 season is expected to reach 60 mln tons, 2 mln tons more compared to the previous season.

SOYB

SOYB:D1 has already been traded sideways for seven months after a strong downfall last year. Lately it has left the two-month downtrend and is currently trying to form an uptrend. Parabolic showed a buy signal. RSI-Bars oscillator overcame the average level of 50 and is still far away from the overbought zone. There is no divergence observed. In our opinion, you can go long when the price crosses the upper Donchian Channel boundary and the fractal at 992.5. You may place the pending buy order above this level. Stop loss is to be placed at the last fractal low and Parabolic point at 958.8. After pending order placing, Stop loss is to be moved every four hours near the next fractal low, following Parabolic and Donchian signals. The most careful traders can switch to the H4 timeframe after order execution, placing Stop loss and moving it according to the price direction. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the Stop loss without reaching the order, we recommend cancelling the position: market sustains internal changes that were not considered.

 

Position Buy
Buy stop above 992.5
Stop loss below 958.8


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