Soybean Meal (NYBOT:JFN14)
Soybean meal has been trending higher since the start of the year and recent weakness in price could offer traders an opportunity to gain exposure on the long side of this market from a more favorable price level. After peaking around 494.0, the market has “cooled off” a bit and now find itself trading just above the support band from 471.0 – 474.0. This support band is the first candidate from which a potential reversal in soybean meal could potentially occur. If price is indeed going to stabilize here for a move higher, look for price action to remain above the 471.0 support line. In the event of sustained weakness below here, 465.8 – 467.0 looks to be the next area of relevant support on the chart. Near term momentum at this juncture looks to be sideways to slightly negative, with longer term directional bias remaining positive. So long a price can remain above the 467.0 low, the positive technical pattern of higher highs and higher lows will remain unchanged.
All things considered, the market still appears to be strong and the recent weakness in price should be thought of only as a minor correction in a bull trending market. With an ascending trendline entering the market around 460.0 – 465.0 in the coming days and significant technical support around 461.4, look for the current correction to dissipate somewhere above this 461.4 level on the chart. Only below here will the current weakness be a threat of materializing into something more than a minor correction.
Soybean Meal 30-minute Bar Chart (e-Signal)