March 18, 2009
CME hogs eye head-and-shoulders bottom
Chicago Mercantile Exchange April lean hog futures have seen a solid price rebound from the contract low of 56.90 cents a pound, scored on Feb. 24.
Prices this week did hit a fresh four-week high of 63.50. Bulls have gained some fresh upside near-term technical momentum recently. The daily bar chart for April lean hogs does reveal that a potentially bullish head-and-shoulders bottom reversal pattern may be forming.
However, the hog bulls have more work to do to suggest the recent corrective bounce can turn into a sustainable price uptrend. A close in April futures prices above solid technical resistance at the February high of 64.05 cents would provide the bulls with solid upside near-term technical momentum to better suggest that a market low is in place and that the uptrend can continue.
Meanwhile, a close in April lean hog futures below solid technical support at 60 cents would deflate the bulls and suggest sideways price action at lower price levels, or even a retest of the recent contract low, or below.
