Chart of the day: Sharp swings in Dalian soya bean futures

PUBLISHED : Wednesday, 19 April, 2017, 8:20pm
UPDATED : Wednesday, 19 April, 2017, 9:56pm

Dalian soya bean futures have had a torrid time this year, soaring to 4,470 yuan (US$650) per tonne early on, only to slump to a low of 3,635 yuan this week. Not surprisingly, historical volatility is well above the very long-term mean and was almost two standard deviations above it late last year. Given that there were small signs of divergence in MACD and stochastics over the past fortnight, we look for an interim base to form. This is because the drop from secular trend-line resistance has retraced a Fibonacci 61 per cent of the previous rally and this area coincides with a rising Ichimoku cloud. The lagging line might also benefit from the sharply rising candles of 26 weeks ago.

Nicole Elliott is a technical analyst