Bunge (BG) is a household name if you grew up in a farming family, lived in the Midwest or visited places such as the great state of Kansas. I often saw Bunge signs along I-70 heading across Kansas to Topeka. Did you know that one Kansas farmer feeds 155 people and you?
Farming-related companies such as BG, Archer Daniels Midland (ADM) and Deere (DE) have been an important part of our country's success in agriculture. We also might be successful in investing in the industry. Let's check out the charts and indicators.
In this one-year daily bar chart of BG, above, we can see a strong uptrend unfolding from a February low. During a February-to-June mark-up BG closed above the rising 50-day simple moving average line and the 200-day line. The On-Balance-Volume (OBV) line moved up strongly in the same period, telling us that buyers of BG were more aggressive and traded more shares on days when BG closed higher.
From June through October BG consolidated those gains and crisscrossed the 50- and 200-day average lines. During this sideways period the OBV line continued to rise, which suggests still more accumulation by foresighted buyers. BG rallied strongly in early November, making a new high for the move up. Notice how the slopes of both the 50- and 200-day averages turn up in November. The trend-following Moving Average Convergence Divergence (MACD) oscillator also moves above the zero line for an outright go-long signal. All bullish.
The bullish setup on BG extends to this three-year weekly chart, above. BG is trading above the rising 40-week moving average line. The weekly OBV line has been positive all year and the weekly MACD oscillator is above the zero line for a buy signal on this longer time frame.
Strategy: I would go long BG at the market and add to longs on a close above $70, or a new high close. Sell stops could be below $63. On the upside the $85 area is my price target for the first half of 2017.