September 17, 2009
Chicago Mercantile Exchange (CME) December lean hog futures are in a four-week-old uptrend on the daily bar chart.
Prices also recently hit a fresh six-week high of 52.10 cents a pound. The bulls have recently gained some upside technical momentum after prices plummeted to a fresh contract low of 43.50 cents in August.
The Moving Average Convergence Divergence indicator overlaid on the daily bar chart for December lean hogs is also in a bullish posture. The MACD line is above the "trigger" line of the indicator. Both lines are also trending higher and are poised to move above the horizontal "zero" line of the indicator, which would be another bullish technical clue.
In order for the hog market bulls to gain fresh upside near-term technical momentum to suggest the uptrend in prices can continue, they will have to produce a close above strong technical resistance at last week's high of 52.10 cents, basis December futures.
Technical support for December lean hogs is located at 50.00 cents. Stronger trend-line chart support is located at the 49.00-cent level. A close below 49.00 in December lean hogs would produce fresh technical damage to suggest the uptrend has run its course and that prices would then trade sideways at best in the near term.