December 1, 2009

CME February lean hog market bulls still powerful

February lean hog futures Friday (November 27) hit a fresh 5 1/2-month high of 68.05 cents a pound.

Prices on Monday did back off on profit-taking pressure from recent solid gains. However, the hog market bulls are still technically powerful and there are no early technical clues to suggest a market top is in place or close at hand.

February hogs at the Chicago Mercantile Exchange are still trading in a strong 3 1/2-month-old uptrend on the daily bar chart, from the early August contract low of 49.1 cents.

The next upside price objective for the hog market bulls is to produce a close above strong technical resistance at the May high of 69.7. Below that price level is located chart resistance at 67, at 67.5, at Monday's high of 67.7 and then at last week's high of 68.05 cents.

Technical support for February hogs is located at 66, at 65.7, and then at 65 cents. Strong chart support is located at 64.8. A close below 64.8 would provide the bears with fresh downside near-term technical momentum and would also be an early clue that a market top is in place.