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TECHNICAL ANALYSIS


Grain Elevator

08/06/10 09:06:41 AM
by Austin Passamonte

Here's the mid-term outlook for soybean futures pricing.

Security:   Soybean futures (S)
Position:   N/A

Grain commodity markets action usually heats up in the summer sun. Mix in a little (or a lot) of rain, hail, drought, or various forms of crop pestilence, and you never know what to expect. "Beans in the teens" is a common catch phrase this time of year. How probable is that for 2010?

FIGURE 1: SOYBEAN FUTURES, DAILY
Graphic provided by: TradeStation.
 
Figure 1, a daily chart view, shows where soybean futures lifted from lows near 880 and coiled in wedge fashion before continuing on upward since. That pause in the ascent usually marks roughly 50% of the eventual range from relative low to high. Measuring 890 to 990 as the first leg projects 990 to 1090 in the second leg before a probable pause occurs.

FIGURE 2: SOYBEAN FUTURES, WEEKLY
Graphic provided by: TradeStation.
 
The weekly chart (Figure 2) shows 1056 to be a historical congestion level dating back to the wild times of late 2008 to early 2009. It held the prior test of resistance in late 2009 and awaits a push upward for resolution.

FIGURE 3: SOYBEAN FUTURES, WEEKLY
Graphic provided by: TradeStation.
 
Adding a Fibonacci projection off 1-2-3 low swing shows where 138 and 162 marks attracted price action. The next level above at 233% is within ready reach and bisects weekly open-close levels from high peak bars in 2008. See Figure 3.

"Teens" pricing may be a little ambitious to plan for. But 11- to 12-cent ranges appear more probable than not, judging from price measured across several different angles and views. Thus, higher grain prices have the current nod until proven otherwise.



Austin Passamonte

Austin is a private trader who trades emini stock index futures intraday. He currently trades various futures markets from home in addition to managing a trader's educational forum

Title: Individual Trader
Company: CoiledMarkets.com
Address: PO Box 633
Naples, NY 14512
Website: coiledmarkets.com/blog
E-mail address: austinp44@yahoo.com

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Date: 08/10/10Rank: 5Comment: 
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