Soybean Oil Futures (CBT.BO) had a rough summer along with nearly every other commodity. Bean oil opened down and stayed that way Tuesday, posting a loss for the fifth time in six trading days. Soybean Oil Futures also saw their 100-day average price drop below the 200-day average price, which indicates the weakness in the trend of the market.
Q: What has happened in the past when Soybean oil futures open down on a day that sees their 100-day moving average drop below the 200-day moving average, omitting any repeat occurrences within ten trading days?
A: According to the 10 previous occurrences of this event, EventEdge indicates that CBT.BO has shown a strong bullish edge that peaks 17 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, Sept. 30, 2008) is Thursday, Oct. 23, 2008.
CBT.BO rallies in 90% of the cases (9 of 10) by an average of 8.2% relative to the close on the event date. The average of the one decline is 0.7%. The overall return of the 10 cases is 7.3%, which, based on the close of CBT.BO on the event date (44.00¢ per lb.), provides a target price of 47.21¢.
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Jeffrey Garceau is an analyst with MarketHistory.com.
