Focus: Rough Rice
The global price of rice has been climbing along with other food staples such as corn and wheat. Some experts are predicting mass shortages in poorer nations and restricted supplies in developed countries, including the United States. Costco and Wal-Mart’s Sam’s Club both made news this week after limiting the amount of rice customers can buy. Part of the reason for rising food costs is the increased cost of food transport. Rough rice moved sideways for a year (2007) before breaking above the resistance line and retesting it successfully. The move was a classic trend breakout from low ADX consolidation (see chart). For more information, reference Chapter 10, ADXodus (from the book ADXcellence). Since then, prices have doubled. Rice also shows how trendlines on ADX peaks can confirm breakouts from low ADX periods (under 25) to new trends; the current trend has an ADX wave of over 80 which is extremely strong.
Chart Courtesy of TradeStation.
Dr. Charles B. Schaap transitioned from health care to wealth care in the nineties. He is the author of ADXcellence —Power Trend Strategies and Invest with Success—Big Profits for Small Investors. Dr. Schaap is a commodity futures strategist and recognized authority in technical analysis of the financial markets. His website is www.adxcellence.com . He can be reached at ADXDoc@yahoo.com.
