I'm a buyer of Soybeans here...this is a long-term Buy and Hold idea...

There has been a lot of discussion in the news lately about Soybeans so naturally I decided to take a look at them.

It looks to me like it could be a buying opportunity,  First of all, haven fallen by roughly -10% since late May  and they are very oversold.  Second, the last time that they traded down to these levels from September 2015 through February 2016, a huge rally followed.  Third, they are well off of their lows of last week and starting to rally,

The economics are very clear here.  With prices this low, farmers grow less soybeans.  With there being less soybeans on the market, prices will rise.  I even heard some farmers on the news discussing how they will be allocating less of their land to soybeans and growing other things.

If you don't trade the futures markets and like to trade equities, there is a Soybean ETF...the symbol is SOYB and the short term chart is shown below. 


TDMI Buy Setup

I like this trading idea.  The idea is to buy TDMI if it breaks its downtrend and rebounds off of the $3.75 level.  It is oversold, at an important support level, and has volumes that could signify capitulation.  The profit target would be around $5.50, and the stop out would be around $3.75.  It makes sense to have a sell target around $5.50.  There will probably be resistance there because it was a support level from early March through early July. It makes sense to have a stop-out just below the $3.75 level because there should be support there.  It was the top of the range last year from June though September.  It this level breaks it will probably head much lower.


Follow Up as of August 5th - A position was never taken because the downtrend line hasn't been broken.  Going to take it off of the watch list.