Setup Condition for Soybean Meal (October 03 W3)
October/12/2008 20:07 Filed in: Commodity Monthly Analysis
Soybean Meal shows good setup conditions this week:
Conditions:
-Commercials: high > 80%
-Sentiment: low < 20%
-Large Traders: low <20%
-Small Traders: low < 20%
-Fundamental valuation: undervalued <20%
-Stochastic: oversold <20%
-Seasonal: uptrend
-ADX: still waiting for a maximum and reversal
Analysis:
-As was the case last week (W2) there are several commodities that are developing good setup conditions. Most commodities are on a downtrend due to the overall economic environment. It is important to note, however, that many of them have been significantly oversold since Spring/Summer 08, they are currently undervalued, sentiment is very low, but users (commercial users) of natural commodities are aggressively buying. These are perfect setup conditions and opportunities to enter long assuming the proper entry conditions are also met (in addition to the setup conditions). For now, we are still waiting to see what happens this week.
Conditions:
-Commercials: high > 80%
-Sentiment: low < 20%
-Large Traders: low <20%
-Small Traders: low < 20%
-Fundamental valuation: undervalued <20%
-Stochastic: oversold <20%
-Seasonal: uptrend
-ADX: still waiting for a maximum and reversal
Analysis:
-As was the case last week (W2) there are several commodities that are developing good setup conditions. Most commodities are on a downtrend due to the overall economic environment. It is important to note, however, that many of them have been significantly oversold since Spring/Summer 08, they are currently undervalued, sentiment is very low, but users (commercial users) of natural commodities are aggressively buying. These are perfect setup conditions and opportunities to enter long assuming the proper entry conditions are also met (in addition to the setup conditions). For now, we are still waiting to see what happens this week.