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Soybean Elliott wave analysis - 19 February 2024

Function - Trend

Mode - Impulsive

Structure - Impulse Wave

Position - Black Wave 5 of higher degree red wave (3)

Direction - Higher degree red wave (4)

Since the peak of the Russia-Ukraine conflict in 2022, SoyBean prices have remained subdued, trading at 1783 in June 2022 before plummeting to a three-year low of 1164 last week. The Elliott wave theory provides insights into the commodity's price action over the past three years, offering a structural pattern for analysis, forecasting, and trading.

On the daily timeframe, SoyBean appears to be undergoing a 3-wave correction denoted as blue wave A-B-C. Wave A concluded with a diagonal pattern, followed by a shallow bullish correction in wave B lasting just over 5 weeks. Subsequently, the decline in blue wave C continued impulsively. Preceding this decline was a 5-wave impulse rally labeled blue 1-2-3-4-5, a common occurrence in Elliott wave theory where a 3-wave counter-trend follows a 5-wave impulse move.

Currently, amid the third leg of the bearish correction (blue wave C), further downside is anticipated as wave C remains incomplete. However, even within a bearish correction, bullish moves can occur, as indicated by the potential development of red sub-wave (4) within blue wave C.

The 4-hour timeframe illustrates the development of sub-waves within blue wave C, with sub-wave (3) possibly concluding with an ending diagonal pattern and a gradual upward price reaction. A breakout above the diagonal's upper boundary would signal the onset of red sub-wave (4), potentially leading to a bullish corrective rally towards the 1239-1263 supply zone. However, this rally may be limited below 1260 before the broader bearish correction resumes with red wave (5).

In summary, Soybean may experience upward movement in the coming days or weeks, primarily corrective in nature. Nonetheless, the overall outlook remains bearish.

Technical Analyst : Sanmi Adeagbo

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