Trade of the week: short soybeans
Since the daily soybeans front month futures chart is showing negative divergence on the Relative Strength Index, we would like to sell soybeans.
We would like to sell soybeans ideally on a minor bounce towards 1,367, with a downside target at 1,267 and a stop-loss above the July high at 1,437.
(AI Video Summary)
Profitable NASDAQ 100 trade
In this week's video, Axel Rudolph talks about his recent successful trades and gives some trading recommendations. First, he mentions his colleague, Shaun Murison, who made a profitable trade by going long on the NASDAQ 100. This means he predicted that the price of the NASDAQ 100 stocks would go up, and it did, making himself a lot of money. Rudolph suggests either letting this trade continue or taking some profits.
Successful DAX 40 trade
Next, Rudolph talks about his own successful trade on the DAX 40 contract. He went long on this contract, which means he predicted that its price would increase, and he was right. He recommend either letting this trade continue or taking some profits.
Unsuccessful Arabica coffee trade
However, not all trades turn out to be winners. Rudolph mentions a trade recommendation from last week to go short on Arabica coffee futures. Going short means predicting that the price will go down. Unfortunately, this trade didn't work out due to negative divergences, which means that some technical indicators were suggesting that the price would go down, but it didn't. Rudolph explains that he set a stop loss, which is a point where he would automatically exit the trade to cut his losses, but he was stopped out and experienced a small loss.
Despite this loss, he notes that if someone didn't stop themselves out of the trade, they may still want to keep it as the technical signs are still indicating a potential fall in price.
This week's trade recommendation
Lastly, Rudolph gives their trade recommendation for this week. He suggests going short on soybean futures when the price bounces back to 1,367. He believes that a top is forming, meaning the price has reached a high point and is expected to go down. He bases this recommendation on negative divergences on the oscillator, failure to break a resistance area, trading below a moving average, and falling out of a trading channel. The suggested entry point is at 1,367, with a stop loss at 1,437 and a target at around 1,267.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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