Soybeans Tech Update

Beans gapped higher last night, saw those gains disappear with a big morning selloff, before clawing back to finish very well. It all sets up an interesting bean chart. Until today soybean futures had spent much of the last month trying to break a back-and-forth, albeit violent, rangebound trade. Could todays price action signal a change?

March futures continue to find buying support at the 26-day exponential moving average. The indicator has held breaks since the rally began in August and did so again during last week’s selloff. That set up today’s trade which saw prices finally managed a close above the old congestion range from 1362-1382.  This area has held the majority of closes going back to late January. Finishing above the quicker 12-day exponential day moving average also signals a turn to upward momentum.

On the flip side there’s some caution over bear flagging forces. A close above the post report day sell-off high at 1403 would alleviate that caution. However, until the market breaks the flag to the upside the potential of confirming the flag still keeps the idea of a short term top open. Falling under the flag support, which coincides with those quicker exponential day moving averages, opens the door for a much deeper correction, potentially testing 1300 again.

Beans are trying to break what’s been a stalemate between the bulls and bears. The buying interest and strong close here today may be tipping the scales. However, with the flag pattern still in play the bull is not out of the woods yet. It could be an interesting week from a chart perspective. Stay tuned.