SOY MEAL

In December I wrote about Soy Meal. A commodity that I’ve often traded and analyzed. Agricultural commodities are perfect for traders who are starting with a small capital. Their low margins allow you to trade 1-2 contracts per trade. Unlike Gold, Silver or even Crude Oil that have high margin requirements, agricultural commodities are better place to start with. I had a very timely call in December on Soy Meal when it was testing the lower boundary of its long-term symmetrical triangle at 270 levels(http://techcharts.wordpress.com/2011/12/10/soy-meal/) Since then price have rebounded sharply and reached 320 levels.

Sharp rebound in December 2010 and pullback in January has probably formed a nice inverted H&S pattern. The neckline of the inverted H&S pattern and the 200 day moving average are overlapping at 325 levels by increasing the significance of this resistance. If we see a decisive break above both the neckline and the 200 day moving average, Soy Meal will generate a clear buy signal in the short/intermediate term. Soy products should be on our watch list in the next few weeks.