Tonight I thought I’d do a re-cap of technical support/resistance areas I like in the Grain Complex. Specifically soy beans, corn and wheat futures.
You should get some good support/resistance numbers to consider, as well as some interesting chart formations I will describe.
First, every one’s favorite January Soybean Futures. On a longer term chart, SF has been in a two dollar sideways trade for the past 6 months.
The highs at 1104 were posted in June 09, we have bounced off of the low range at 891three separate times since July 09, and most recently the October low at 885 1/2. With Today’s high at 1069 1/4 we have resistance at the Jun 14th highs between 1080 and 1088. Past that we could be looking at 1104. On a longer-term basis, we’d have to break above 11 dollars on very solid move for the trend to really shift to bullishness. Perhaps this is the target we have our eyes on for Summer 2010. To get there, we have to build a nice base, on with this support at the 885-900, it is shaping up to look that way. Just a possibility.
With yesterday’s fresh high at 1069 1/4, we have support at 1024> 1010 > 996 1/2. Those are areas to consider establishing long positions for some possible 5 or 10 cent bounces from those levels.
Now for December Corn. Between the Nov 2nd low at 359 1/4 and the Oct 23rd high at 413 1/2, CZ has basically been in a sideways 50 cent trading range. Any fresh breakout from this range will be significant and will signal the direction of the next 30 to 50 cent rotation. I say rotation, because typically that’s what it feels like. The market rotates up or down to a new range, then spin cycles through that range, until a new piece of information pulls the market into a new range.
One interesting chart formation I wanted to point out is on the CZ daily chart. The 6 month high at 473 1/2 *posted Jun 2nd* is the top of our longer term range. The bottom of the sell off from that high was posted on Sep 8th at 302. A nice $1.75 cent down move which was a payday for the patient bears.
What is really interesting is if you run a Fibonacci study on those days, you get 408 1/4 as the 62% RT, (RT is for retracement). 387 3/4 is the 50% RT, and 367 1/4 is the 38% RT. We have been bouncing around those three retracement levels for the past 8-weeks.
We are either stuck in a time warp, or this market is building a base for its next rotation up or down. A cursory look at the charts gives the impression that its building a base to move higher. We will know when we get a definitive move away from this congestion level.
Finally we have December Wheat. WZ poted a high back on Jun 1st at 725 1/4. Over the next 4 months, we gyrated lower to the Oct 2nd low at 439 1/4. Almost at 3 dollar down-move over those 4 months.
The 38% RT is at 549 3/4. The 50% RT is 583. A look at the daily’s shows you how influential those numbers have been over the past 2 months. We have yet to challenge the 62% RT at 616 1/2. However, its a number I would keep in mind if I was thinking of getting short WZ any time soon.
On a shorter term time frame, the resistance areas for WZ should be 568 1/4> 579 3/4> 583 1/2 and then we have to go all the way back to Aug 3rd at 585.
Support for WZ short term would be 547>536>525>510>498
That’s it for the chart points in the grains.
Good Trading
