November 5, 2009
Technical Special: CBOT corn holds above key Fibonacci level
December corn futures this week have regained near-term technical momentum after a sharp downside price correction last week.
Importantly, Monday's (November 4) low of US$3.59 1/4 in December corn at the Chicago Board of Trade marked the 50 percent Fibonacci retracement level of the price move from the September low of US$3.02 to the October high of US$4.13 1/2.
Prices on Monday rebounded strongly from that key technical level to post a bullish outside day up on the daily bar chart, whereby the session high was higher and low was lower than the previous session's trading range, with a higher close. December corn on Tuesday then showed important follow-through buying strength.
The solid rebound in December corn from the key 50 percent Fibonacci retracement level this week strongly suggests that price level will not be retested soon and that the price uptrend on the daily chart has resumed.
The next upside price objective for the corn market bulls is to produce a close above strong overhead technical resistance at the October high of US$4.13 1/2 a bushel, basis December futures. Below that level does lie psychological resistance at the US$4.00 level, which prices are now challenging.
