This is the long term monthly chart of poultry dated back from 1994 until September 2019 taken from Fred database.
As you can see here, poultry has NEVER been in a downtrend since 1994. It launched particularly strong since 2011 (marked in the chart). That has changed.
The uptrend persistence is over after a repeated boom-bust since 2017.
People have pushed it too far. That is why we saw twice boom-busts cycles like those in less than 2 years!
Just look at the historical price above...we have never seen anything like it.
When people push it too far, that is when the tipping point is.
The weakness in poultry is also apparent in momentum indicator (RSI).
This observation I’m about to tell you will be lost to most people. Recent upward movement could not push RSI above its moving averages, and importantly, RSI peaked below 60. Yes, those are bearish. In a bear market, RSI tends to peak near 60.
At the moment, the only bullish indication is the fact that RSI still holds near 40.
My guess is that level would not hold for long.
Poultry has boomed since 2011. Now, that boom is over.
When the boom finally turns into bust, as all booms are, price tends to go to the beginning of the boom...and beyond!
Updated chart: Just found a way to display it in my favorite charting software.
Here is the poultry chart again, now with full technical tools employed.
Poultry Long Term Chart
Reversal pattern head and shoulder is spotted. This is one exception from traditional pattern which I pay attention to. A price projection from head to neckline spells a very deep correction to come.
This is a monthly data, do not pay attention to the ‘Daily’ label on the chart. The last data is September 2019. At the latest data, RSI is in 40 level. A technical bounce is to be expected from there (which we are experiencing currently). But, it does not change my view that the long term bull market in poultry has ended.
Keep this chart in mind when analyzing: JPFA, CPIN, and MAIN.
Now that I could do this trick from FRED data, might as well do the same for palm oil.
Palm Oil (CPO) Long Term Chart
I believe this is a weekly data (again, do not pay attention to the ‘Daily’ label on the chart).
Important support is clearly seen and now being respected.
Now, squint your eyes. Focus on the ‘Composite Index’ indicator. The second chart, just below the price data.
This additional information alone is the reason why it is so worthwhile to do all these troubles.
Notice that The Composite Index (which is an unbounded oscillator derived from RSI) just touched and rebounded near to its two moving averages where these moving averages just about to cross each other. This is a major signal. In fact, in all of my years studying technical analysis, I can say that this signal is the single most important, and reliable BUY signal for trading purposes that I have known.
You can also see that the RSI is also testing its moving average at the same time. And look where the RSI made the rebound? Near 40 level, a support area in bull market.
Keep this chart in mind when analyzing: AALI, BWPT, LSIP, SIMP.
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