Soybean Oil - It can become a hot trade soon againSome exotic for today.
I really like to look at products which has been consolidating for long time.
Yesterday I published a post about wheat, corn and soybeans (see link below), where I showed you how soybeans has been moving sideaways in an appr. 5 %+ range. The case is same with Soybean Oil. It has been moving sideaways for 3 months now. Why do I think it is important? Let me show you a few things.
Daily:
- Obviously the Price action is totally neutral, it has been consolidating for more than three months now, as you see in a range between 31,40-33,40, except one squeeze and breakout attempt, which however was blocked then by the thick Kumo Cloud.
- Flat Kijun Sen, flat Kumo, Chikou Span is swinging ard Price candles, very low ADX. -> all in all there is no trend.
- What makes me think a break on upside has slightly bigger chance is the positive divergence in MACD and in Slow Stoch in forms of higher lows. Also despite low ADX, DMI is rather early bullish. These are all weak signals, put worth to watch.
- Upper resistance is clearly at 33,40-33,50 at the horizontal line and the inner trendline. A sustained break above this level could bring a quick bullish move.
Weekly:
- Ichimoku setup is bearish, but Kijun Sen is catching down to price, and getting close in touch with the steeper trendline's level.
- MACD is kind of bullish and here we also have a Slow Stoch cross with higher low.
- DMI is close to cross bullish (ADX dropped as well), so probably the price decline for medium term can be over, and we may see some correction.
- And look at the Price action itself! If you zoo out the chart, you can not find one more period, where the Price was so stable, stuck in such a thin range! Obviously we do not know which direction it will start the next move, but I am sure the move will be sharp and quick. If the break happens on the top side, the retracement tgt is ard 36,50. If it can not hold the 32 +/- level then bearish extension would hit it down to 26-27.
p.s.: watch it close together with its big brother, the Soybeans.
