Focus: March Soybeans
March soybeans dropped 29 points last week to close at $9.80, about 10¢ above the previous daily support. There is a developing bullish pennant pattern. Price could drift lower this week inside the pennant range. Penetration of support, followed by a quick reversal back above support, would provide an opportunity to enter a long position for the swing up to resistance at $10.40. ADX is currently weakening and may drop below the 25 level. However, the strong +ADX peak in January suggests soybeans are set to retest the previous highs once +DMI strengthens. That could lead to a breakout with targets of $11.00 and $12.00. Also, since the +ADX is stronger than the preceding –ADX, there has been a shift in trend strength from the bears to the bulls.
Chart Courtesy of TradeStation.
Dr. Charles B. Schaap transitioned from health care to wealth care in the nineties. He is the author of ADXcellence —Power Trend Strategies and Invest with Success—Big Profits for Small Investors. Dr. Schaap is a commodity futures strategist and recognized authority in technical analysis of the financial markets. His website is www.adxcellence.com.
