Over Extension on Soybean OilExecutive Summary
RSI Overbought - Last time the RSI sat above 70 on the weekly was first week October 2011 through early November, where the price tried multiple times for +$60 and some change. Failed to $47, looking for the same sort of retracement. Negative Divergence.
Volume - High new volume this past week. My thoughts are sellers taking their profit alongside with RSI.
Outside Upper Keltner Channel - Riding outside Keltner channel as well as 2SD of price. A retracement is coming.
Description
My thought is that we are overextended here. Yes we have gone parabolic, but Last time RSI surpassed 70 on the weekly, let alone the daily, was October 2011. We saw a $20 drop from 60 to about 40 and there has been a continuous bear before then. Price is going to regress to the mean looking at the keltner channel and how we are outside 2 SD of price.
The more fascinating piece is the new onset volume we are seeing. This came about last week - and will be interesting to see how traders are headed this route.
(Hypothetical) Fundamental Thoughts
The USA is the top Exporter in Soybean and Soybean oil, especially as alternatives to protein intake - outside of typical animal produce - may become more popular. Hurricanes have left these states mainly unaffected.
Short payout is 2:1 reward/risk
