Wednesday, January 2, 2008

Soybean bullish divergence


At 11:05 local time, the soybean retracement hit bottom, as signaled by a bullish divergence on the tick chart Klinger volume indicator (right chart, subgraph, red/green indicator passed below its yellow MA). It shows signs of upward price exhaustion by 11:20, however. I made a few ticks of profits.

When I see these volume-based divergences, I tighten my stops to beneath the last two candles. If price move lower and take out those stops, so be it. If prices continue moving higher, then I will move out my stop loss once the Klinger volume indicator starts to move up through its MA once again.