/LB (lumber futures) has hit my 825ish initial downside target on what I suspect will be a brief momentum-fueled overshoot while at extreme oversold readings on the daily RSI, thereby offering an objective long entry here for a bounce trade.
LB daily June 28th
The 60-minute chart below shows my two bounce target zones on /LB, T1 zone (~902-934) & T2 zone (~1111-1191) which would represent a rally of approximately 16% to 45%, respectively, if hit. Suggested stops would be commensurate with one’s preferred price target(s), ideally using an R/R of 3:1 or better.
LB 60m June 28th
While I favor a tradable bounce here & believe that the R/R is favorable enough to step in long & try to catch this falling knife, should lumber continue to fall much below the recent lows, the next solid support comes in around the 650 level & should it get there soon, we would likely have positive divergent on the daily RSI as we did on the previous two oversold bottoms which are circled in green on the daily chart above.