Technically Speaking

Short-term Support in Soybeans

Source: DTN ProphetX

Though it seems like a long time, soybeans new-crop November 2018 futures contract (SX8) has only been in a minor (short-term) downtrend since posting a high of $10.24 on Tuesday, December 5. The following day the contract closed at $10.14 1/2, low enough to establish a bearish crossover above the overbought level of 80% by daily stochastics signaling the end of the previous minor uptrend and beginning of a downtrend.

Wednesday's overnight session into Thursday morning finds SX8 posting a low of $9.92 1/2, testing support near $9.91 1/2. This price marks the 38.2% retracement level of the previous minor uptrend from $9.39 1/2. Meanwhile, daily stochastics (bottom study)have fallen below the oversold level of 20%, putting the contract in position to once again change directions if a bullish crossover can be established.

Note that SX8, despite being in a short-term downtrend, continues to show a series of higher highs and higher lows consistent with what could still be classified as a secondary (intermediate-term) uptrend on its weekly chart. There we continue to see resistance at the previous high of $10.28 3/4. Even if SX8 falls below support at $9.91 1/2 to test the 50% retracement level near $9.81 1/2, the series of higher highs and higher lows would remain in place as long as it didn't move below the previous low of $9.80 1/2 from November 14.

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