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Technical Analysis - Trading: 2015-05-12
El Nino announced to make appearance
Today we examine the &&Grain_4 PCI. It includes wheat, corn, soybean and oats in equal volumes of 100 bushels, so the given personal composite instrument is suitable for portfolio investment. Japan Meteorological Agency and Australian Bureau of Meteorology were the first ones to announce the appearance of a natural phenomenon El Nino this year. Last time it was registered in 2009 and caused severe drought in India over 40 years. Weather conditions took a turn for the worse on the Eastern hemisphere, causing a marked upsurge in food prices. Now Indian meteorological agencies estimate the probable occurrence of El Nino at 70%.
The &Grain_4:D1 chart shows signs of an uptrend movement start and the price crossed the previous fractal high. Bollinger bands have widened. The last candlestick on the MACD histogram chart closed below the signal line and the zero level, which can be considered a bullish signal. Parabolic also indicated a buy signal. Bars on the RSI chart are moving up and formed a bullish divergence. The last bar is currently located below 50. We deem that a bullish momentum might be formed after the &Grain_4 candlestick is being closed above Parabolic points and the second fractal high at 366. Stop loss is to be placed below the first formed Parabolic point. This level can currently act as a support line (353). After pending order placing, Stop loss is to be moved every four hours to the next fractal low, following Parabolic and Bollinger bands signals. The most careful traders can switch to the H4 timeframe after order execution, placing Stop loss and moving it according to the price direction. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the Stop loss level without reaching the order, we recommend cancelling the position: the market sustains internal changes which were not considered.
| Position | Buy |
| Buy stop | above 366 |
| Stop loss | below 353 |
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