Corn Bulls Trying to Gain Momentum; More Work to Do

February 8, 2009 06:00 PM

Corn futures at the Chicago Board of trade on Monday morning were trading higher and near the session high after producing a bullish weekly high close on Friday. Prices gains of the past three trading sessions do begin to suggest the "February break" seasonal phenomenon has run its course as prices did trend lower from early January through early February. Recent price action has also pushed March corn futures right up to trend-line support from a downtrend line drawn off the early- and late-January highs. A higher close on Monday and then good follow-through buying strength on Tuesday would negate the downtrend line and provide the bulls with better upside near-term technical momentum. However, see on the daily bar chart that a bearish descending triangle has recently formed, which could derail bullish momentum if prices see solid downside price pressure in the next couple days, to produce a bearish downside breakout from the triangle pattern. The next upside price objective for the rejuvenated bulls is to produce a close above major psychological resistance at $4.00 a bushel, basis March corn futures. Below that level is located chart resistance at $3.86, at $3.90 and at $3.95. Technical support for March corn is located at Monday's low of $3.72 1/2, at $3.70, at $3.65, at  the January low of $3.58 3/4 and then at last week's low of $3.55 3/4.--Stay tuned! Jim Wyckoff

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