This week, I will continue to learn about technical analysis and exercise it in my tradings. At this point, I am so new to technical analysis. I will say that my “predictions” would be mixed with guessings as well. Therefore, I will still go back to the fundamental side of the information to make my decisions. On a day without too much new information from the market, let’s look at the technical here:
Corn: It appears to me there’s the descending triangle formed before the past week’s trade and the breakout below the support was the Friday before where the corn prices fell hard upon the release of USDA Crop report. It’s that’s correct, the price should pick up a declining trend which hasn’t quite happened yet. On the other hand, the open interest and volume appear to go downward which suggest if there’s trend, it’s becoming weak. I guess I just need to be patient and see how things pan out next week before making any move in the corn market.
Soybeans: The soybeans prices clearly appear with a downward trend. Based on the RSI indicated in the graph below, it’s oversold which could suggest a reversal on the way[1].
Wheat: The wheat prices shown in the graph below is below the moving averages (black: wheat prices, blue: moving average of 5 day, red: moving average of 10 days, green: moving average of 20 days). This indicates a sell signal.
I am still stuck with 5 losing contracts (2 longs on soybeans, 3 longs on wheat). If my “conclusions” above are correct, I should look for a time to offset my long contracts on soybeans and set a stop loss for my long contracts on wheat or wait for it to go back up? Ok, I still need to think this through or if you have any suggestion?
Cheers.
1. Investopedia. (n.d.). Technical Analysis: Indicators and Oscillators. Retrieved from http://www.investopedia.com/university/technical/techanalysis10.asp#axzz2CWdwOW7t