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Chicago Dec. Wheat Still Mired in a Downtrend

00:00AM Jul 30, 2008

    December soft red winter wheat futures at the Chicago Board
of Trade are still mired in a four-week-old downtrend on the
daily bar chart, despite a recent short-covering bounce from
last week's decline to a fresh six-week low.
    December wheat also sees two popular shorter-term moving
averages (9- and 18-day) aligned in a bearish posture, as the
9-day is below the 18-day moving average. These two moving
averages have done a good job of producing crossover buy and sell
signals the past several months.
    The bears would gain better downside technical momentum by
pushing and closing December wheat futures below strong technical
support at last week's low of $7.98 a bushel. A close below that
level would open the door to a challenge of technical support at
the May low of $7.68.
    The soft red winter wheat bulls would gain fresh upside
near-term technical momentum by producing a close above strong
overhead chart resistance at Monday's high of $8.55 a bushel.
That would open the door to a retest of major psychological
resistance at $9.00 a bushel.