Soybean futures had a breakout setup for today. This setup resulted in a strong trend move higher today.
Monday was an inside and narrow range day (NR7) for November soybeans. This consolidation told us to look for a breakout, directional move today as yesterday’s directional indecision resolved itself today.
As is normally done, we look at the previous session high and low for our first breakout reference prices (I spoke a bit longer about this in yesterday’s post HERE.) On the upside, if we wanted a more conservative entry we could also watch the Friday high of 897-0 on the upside, as it would be potential resistance on a rally.
In the overnight session, beans managed to just take out Monday’s high, but it closed back below there at the close of the night session. This kept Monday’s 894-4 high in play as our first upside breakout level.
The 8:30 AM open was 893-0, a bit lower than the overnight close. They quickly rallied off the open, taking out both upside breakout levels within 10 minutes of the day session open. For either entry we could use the 892-2 low as our first stop loss level or the overnight low of 886-0 if you wanted a wider stop.
From here the market trended higher over the course of the session, the kind of one way market we anticipate on a breakout day. Note the market made higher highs and higher lows over the course of the session. This is why I preach patience with staying in a breakout trade as trends can go longer and farther than you anticipate in the beginning.
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