In the commodity world, “softs” are generally agricultural products. I brought you attention to these potential breakout plays a month or so ago on this video. If you took the time to watch that video, you may have profitably participated in some of the trades I noted at that time. If you do not watch my weekly video’s, might I suggest that you make a habit of doing so? I present ideas that are often NOT presented in this blog. You may be missing out on some great trading opportunities – so I might suggest you consider subscribing to the video’s in addition to this blog if you don’t already do so. Today, I’d like to take a deeper dive into some of the softs which are, in many cases, on the brink of some exciting technical breakouts.
I’ll present the charts of tradable ETF’s or ETN’s where possible. Note that Canadian investors should explore tax implications when trading such vehicles before diving in. Some of them require unique US reporting forms to be filled out. I will make my commentary quick and to the point to keep the flow going.
Wheat is pausing after a sizable consolidation/ base formation. A breakout through $7.20 would be bullish.
Soy beans (SOYB)
Soy is consolidating between $22 support and $24.50 resistance after a strong move. A breakout through $24.50 would be bullish. A purchase near $22 may be appropriate for more aggressive traders.
Corn looks a little like Soy (above). A pause after a big move. Support lies near $20, resistance near $23. A breakout through $23 would be bullish.
Coffee (JJOFF, JO, or MB)
On the JJOFF chart, coffee displays a big consolidation pattern with a lid near $23.50. Its relatively long consolidation suggests that if that lid is taken out, there is substantial upside potential.
Sugar has broken out. Its resistance (neckline) near $8 has been penetrated, suggesting technical targets to various former support zones near $9.50, $10.50, and if all goes well, as high as the mid-teens. As an aside – if you subscribe to the ValueTrend Update newsletter, I am planning on writing about a trade we recently did that took the sugar chart into consideration when we took profits on a consumer staple stock in the ValueTrend Equity Platform. If you don’t already subscribe to the newsletter – I’d encourage you to do so here.
After a strong rally, cotton is forming a perfect symmetrical triangle. A break of the triangle through $49 or so might imply significant upside potential.
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