Corn Futures (CBT.C) rallied 2.1% during Tuesday's session to close at $5.64'6 per bu. Corn has rallied on four of the last five trading days and is up 11% over the span. With the recent bullishness, corn crossed above its 200-day moving average on Tuesday. On the other hand, all the other grains traded at the CBOT recorded a decline. Will the bullishness resume after Tuesday's relative strength?
Q: How has CBT.C performed in the past when it rallies by more than one third of a percent to cross above its 200-day moving average while soybean (CBT.S) and wheat (CBT.W) futures record a decline?
A: According to the 12 previous occurrences of this event, EventEdge indicates that CBT.C has shown a strong bullish edge that peaks five trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, Aug. 19, 2008) is Tuesday, Aug. 26, 2008.
CBT.C rallies in 83% of the cases (10 of 12) by an average of 2.1% relative to the close on the event date. The average of the two declines is 0.2%. The overall return of the 12 cases is 1.8%, which, based on the close of CBT.C on the event date ($5.64'6), provides a target price of $5.74'7.
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Ronish Patel is an analyst with MarketHistory.com.
