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Grain Hedge

RSS By: Brock Schimbeno, AgWeb.com

Grain Hedge is a self-directed discount brokerage that saves farmers money when trading in the futures and options market. For $7 commissions per side producers can execute their marketing strategy with authority, any time the markets trade.

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!

Corn1025

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