SINGAPORE: The CBOT soybean July contract may bounce more into a range of $8.35-3/4 to $8.41-3/4 per bushel, as it has found a support at $8.16-1/4.
The support is provided by the 314.6 percent projection level of a wave 3 from $8.96-1/2. The strong recovery of the price from the Monday low of $8.16-3/4 and the bullish divergence on the hourly RSI suggest the contract may have temporarily bottomed.
A gap forming on Monday was partially filled. It looks like an exhaustion gap, which signals a completion of the wave (3). On the daily chart, a hammer appeared around a support at $8.21, the 76.4 percent projection level of a downward wave C from $9.64-1/4.
This hammer also looks like an abandoned baby, which is a strong reversal signal as well. The contract may bounce towards $8.48-1/4 or hover above $8.21 for some time before resuming its fall towards $7.76-3/4.
* Charts are not available in reports received in email box through "Alert". To get charts, use the news code of to retrieve the original reports.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
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