We believe bias is still up on the short term basis while, uptrend on the longer term is still intact. There is yet any clear sign of changing trend in longer term basis despite the bearish engulfing pattern on weekly chart two weeks back (chart 3). The strong move last week have somewhat eased the bearishness though a close above 3750 is required to completely erase any possible weakness.
The shorter term trend is also looking up. We believe price has recently made bottom at around 3450 as:
1) 30 min RSI was oversold, lowest since 3100 bottom;
2) Daily stochastic may have turned back into buying mode;
3) Nov high of 3450 turning support;
4) Last week upmove retraced more than 61.8% of 3750 – 3470 downmove;
5) The grain complex are moving higher again, new high in corn, soybean and beanoil and
6) 3470 bottom is 17 days after 3100 bottom, possible midway of 35 day cycle.
However, price has to close above the 2 day high of 3675 to confirm the bullish bias. Price may turn weak on close below 3640 and expect selling pressure to increase on close below 3500 and definitely 3470.
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