Grain TV by Grain Hedge
Grain TV is a daily recap after the market close, providing opinions on fundamental analysis of market direction, influences and expectations. This daily program is produced by Grain Hedge, a discount brokerage firm that provides farmers and elevators with agricultural intelligence including live market quotes, cash bid data, the Grain Hedge Optimizer™ and mobile trading platforms, all for $7 commission per side. Grain Hedge provides tools to allow farmers the ability to trade when the markets move without having to wait for a broker and the information to execute a marketing strategy with confidence.
Are We Close To A Break Out?
Oct 25, 2011
Today will be the first in a series we are calling Technical Tuesdays. Every Tuesday moving forward we will take time to breakdown price movements on corn, soybean, and wheat charts. Technical analysis is only part of the equation that producers should be looking at when marketing grain, but it can provide important insights into near term price movements and long term trends.
This week we highlight a bull flag that has developed on the DEC corn daily chart. Each candlestick below represents one day's price movements, and you can see that following the near limit up day on October 11th we have settled into a range between 630 and 655. This move on October 11th forms the flag pole, and the range we have traded since then is the flag.
Technicians look for a break out to the upside out of a bull flag, with upside potential being equal to the length of the flag pole. This is especially true when the flag pole was formed on a day with strong trade volume, as we saw on October 11th. A move like this would put us in the 688 range, and this would fill the small gap-down move on September 22nd. There seems to be fundamental information today out from China that supports this technical analysis, but we believe that a move higher will only be an uptick in a otherwise downward trend. To do some of your own chart analysis from home, take a demo of the Firetip platform today!
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