August 20, 2008
Corn futures see positive developments
December corn futures at the Chicago Board of Trade have seen prices post a solid rebound from the August low of $5.04 ½, although trading has turned choppy. Recent price action has penetrated on the upside and negated a downtrend line drawn from the July contract highs of $7.99 ¼. In fact, the recent sideways trading action has produced a minor bullish pennant pattern on the daily chart for December corn futures.
Corn bulls are also eyeing the Moving Average Convergence indicator overlaid on the daily chart for December corn. The MACD line of the indicator has recently moved above the "trigger" line of the indicator, which is a bullish signal. Recent MACD/trigger line crossovers have done a good job of identifying near-term price trend changes in December corn.
The next upside price objective for December corn bulls is pushing and closing prices above solid technical resistance at last week's high of $5.79 a bushel. Above that lies major psychological resistance at $6.00 a bushel.
The next downside price objective for the December corn bears is to push and close prices below major psychological support at $5.00 a bushel. Just above that level does lie strong support at last week's low of $5.04 1/2.
