Commodity chart of the day
Daily Soybean oil
Over the years I've found that soybean oil as the name implies is influenced by the movement in soybeans and Crude oil. Being we've just seen a major correction in both of these underlying markets it makes sense that soybean oil prices have also declined of late. In the last 2 weeks Crude oil is lower by roughly 8%, in the last 3 weeks soybeans are lower by 10% and soybean oil has lost 9% within that time frame.
Now looking at the chart above for a trade I think aggressive traders can probe longs. As you can see the market is oversold and as long as the red support line holds on a closing basis I think you can try to time this reversal. A close over the 61.8% Fibonacci level would confirm an interim low was established. While I do not feel prices will race back to their highs overnight we should get a bounce out of here. This is a 60,000 lb. contract so every point move equates to $600. Risk to reward your looking at $300-400/per with a $700 plus objective.
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