Bonds, Currencies & Commodities
Soyabean: Ideal time for harvesting profits

There is a strong likelihood of soyabean topping out before end of August 2012 in the price range between Rs3,850 andRs4,100. Thus, it would be prudent to exit longs in soyabean in any further rise even though it’s in a “new high” territory

Soyabean close: 3,746 (23/06/2012)

Market Trend

Short Term: Up 
Medium Term: Up
Long Term: Up


One can see in the daily chart of soyabean (spot) that the price has rallied from a low of Rs2,031 (8 October 2011) to the current levels of Rs3,746 (23 June  2012), a stupendous 84.50% rise in a period of slightly more than nine months. We will now try to ascertain from this movement whether soyabean in nearing a significant top in prices.

The movement in price is as under:

  1. The rally began from Rs2,031 and went up to Rs2,638 (Rs.607) in a period of 67 TD (trading sessions). This is Wave I of the rise.
  2. The 61.8% retracement of the rise from Rs2,031-Rs2,638 gave a downside target of Rs2,262 for the correction. This correction saw soyabean drop sharply to a low of Rs2,257 (Rs381) in a period of 15 TD (trading sessions). This was Wave II.
  3. As is the case, the Wave III was explosive and the targets as per the ACP (Alternate Cycle Projection) were Rs3,471 (ratio of 2) and Rs3,836 (ratio of 2.618) and PCE (Price Cycle Expansion) were Rs3,620 (ratio of 1.618) and Rs3,852 (ratio of 2). The actual top fell into this price window when it made a high of Rs3,736 (3 May 2012) a rise of Rs1,479 in 80 TD (trading days). This was roughly 1.272 times (85 TD) the rise in Wave I of 67 days.
  4. Wave IV (13 TD, a Fibonacci number) was almost equal to Wave II (15 TD) in time. Interestingly the decline from Rs3,736-Rs3,132 (Rs604) in price was approximately 1.618 times the decline in Wave II (Rs.381).
  5. From here the Wave V began and is now 32 TD old during which the price has rallied by Rs644 from Rs3,132-Rs3,776 which is higher than the rise witnessed in Wave I from Rs2,031-Rs2,638 (Rs604). The rise in percentage terms in Wave I from the low Rs2,031 was roughly 30%. If Wave V equals Wave I in percentage terms then the price should advance by Rs939 from the low of Wave IV of Rs3,132 to Rs4,071. Assuming that Wave V is 61.8% in time of Wave I, it should last 41 TD sessions from the low of Rs3,132 and we have already completed 32 trading sessions i.e. 9 TD still to go. If it equals Wave I in time (67 TD) then this rally still has 35 TD to go.

From the above it is very clear that we are nearing a very significant time/price window in which soyabean could make a significant top. There is a very strong probability that soyabean is likely to top out before end of August 2012 in the price range between Rs3,850 andRs4,100 or slightly higher before a sharp correction sets in. The oscillators are also in extreme overbought territory and also signaling a negative divergence. Looking at the overall picture it would be prudent to exit longs in soyabean in any further rise even though it’s in “New High” territory.

Soyabean is planted in the US ideally in May. These initial reports will also be available during the July/August period. The other interesting thing to note is that this commodity has invariably moved against the overall commodity pack which has been under pressure for some time now, hence an ideal situation for a top. On the other hand, it also implies that precious metals and energy might be nearing a bottom in the months ahead. Well, only time will tell but as they say, “It’s better to be safe than sorry”.

Note: The waves mentioned above are meant to be significant advance/decline in prices and by no means idealistic Elliot Wave patterns. They have been mentioned above for making it easier to understand.

(Vidur Pendharkar works as a consultant technical analyst & chief strategist at  www.trend4casting.com)

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Suspended DGM of SEBI gets bail in graft case

CBI had arrested Averjeet Singh along with his accomplice on a complaint filed by Ahmedabad-based trader for demanding and accepting bribe of Rs10 lakh to clear his name in a case of market manipulation

 

Ahmedabad: The Gujarat High court granted bail to Avarjeet Singh, the suspended deputy general manager of Securities and Exchange Board of India (SEBI) in a bribery case lodged by a city-based trader, reports PTI.

Justice JC Upadhyay, while allowing the bail petition of Singh, also directed him not to go to Mumbai, where he used to work at Sebi office, till 31st July.

The court has granted bail to Ashok Mehta, an accomplice of Singh in the case, as well.

"The bail was granted subject to both of them furnishing bonds of Rs25,000 and would need to report once every month to CBI office here which is investigating the case," said Senior Counsel PM Thakkar, who represented Mehta.

The bail applications of the accused currently lodged in Sabarmati Central Jail under judicial custody were rejected by the special CBI court last week.

CBI had arrested Averjeet Singh on 2nd June along with Mehta on a complaint filed by a city-based trader for demanding and accepting bribe of Rs10 lakh to clear his name in a case of market manipulation.

Singh was first sent for three-day remand by a CBI special court. The agency then sought further remand which was refused by the court.

Following this, the investigating agency approached the high court pleading that it needed five more days to interrogate the accused. The court on 15th June allowed another four days' custodial interrogation of Singh.

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TDSAT allows broadcasters to be party in tariff row

The Hinduja group MSO had challenged TRAI's order that the charges collected from the subscription of paid channels or bouquet of paid channels shall be shared in the ratio of 65:35 between MSO and the local cable operator respectively

 

New Delhi: Broadcast tribunal the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) allowed several news channels and the News Broadcaster's Association (NBA) to be a party in the dispute between the sectoral regulator and multi system operator (MSO) IndusInd Media Communications Ltd (IMCL) over tariff as part of proposed digitalisation, reports PTI.

A TDSAT bench allowed news channels - NDTV, Time Global (holding company of Times Now), India TV, TV Today, Total TV and NBA -- to be a party a case filed by IndusInd Media Communications Ltd (IMCL) against the Telecom Regulatory Authority of India (TRAI).

IMCL, a Hinduja group MSO firm, had challenged TRAI's order that the charges collected from the subscription of paid channels or bouquet of paid channels shall be shared in the ratio of 65:35 between MSO and the local cable operator respectively.

The TDSAT also allowed the plea of India Broadcast Foundation (IBF), a lobby group of television broadcasters to be a party in it.

However, the TDSAT also said that broadcasters' impleadment would be subject to the objections raised by IMCL.

Impleadment means to be added as a party.

It also asked TRAI and broadcasters, which has allowed to implead to file a comprehensive reply before it within four weeks and three weeks to MSO to file its rejoinder.

TDSAT asked to list the matter on 7th August for next hearing.

The tribunal's direction came while hearing the petition filed by the Hinduja group owned MSO challenging TRAI's tariff order for digital addressable systems.

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