SOY MEAL

In December 2011 and January 2012 I wrote about Soy Meal and the possibility of strong moves that could follow in Soy products.

http://techcharts.wordpress.com/2012/01/24/soy-meal-2/

Soy Meal has been forming a perfect text-book long-term symmetrical triangle and in the past two months it has rebounded from the lower boundary of its long-term consolidation range. The rebound started from 270 levels and reached 325 levels in January. It formed a clear inverted head and shoulder pattern with the neckline standing at 325 levels. This important resistance at 325 levels was broken on the upside in February. The strong breakout was followed by a rally towards the upper boundary of the long-term symmetrical triangle at 370 levels.

Strength in soy products in the past two months helped Soy Meal to reach its long-term resistance at 370 levels. This is also the inverted Head & Shoulder pattern price target. A breakout above 370 will generate a long-term buy signal for Soy Meal, but before that we are likely to see a pause in the strong rally that took prices from 270 levels to 370 levels in less than 3 months.

3 year-long symmetrical triangle on Soy Meal is on our watch list. This is a chart pattern that a technical trader/investor shouldn’t miss. It is important to note that price is now close to a major trend resistance that was tested 4 times in the past 3 years.