Soybean meal futures (CBT.SM) have rallied over each of the last four days to break above its upper Bollinger band as it closed at its highest point since March by closing on Wednesday at $360 per ton with a 'big' 3.7% gain. When CBT.SM has seen such a streak of rallies in the 2nd quarter, EventEdge indicates that the bullishness will continue.
Q: How has soybean meal performed after rallying four consecutive days with the fourth being a 'big' move that crosses above the upper Bollinger band when the date is in the second quarter of the year?
A: According to the 14 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that meal has shown a somewhat bullish edge that peaks 13 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Wednesday, June 4, 2008) is Monday, June 23, 2008.
CBT.SM rallies in 79% of the cases (11 of 14) by an average of 7.6% relative to the close on the event date. The average of the three declines is 2.4%. The overall return of the 14 cases is 5.4%, which, based on the close of CBT.SM on the event date ($360), provides a target price of $379.40.
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Mickey Schoenhals is an analyst with Markethistory.com.
