Focus: Corn Making Key Test of Support
The grain complex has been in a daily range for the last five weeks, but Friday’s action may show that change is on the way. Corn broke a key level of support and closed down at $3.38-4. Corn has not been this low since August of 2006, so price may struggle to push lower. Could this be a bear trap? If corn reverses back up through the previous horizontal support level, then it could easily test the upside trendline, which is not far away. While the DMI is strong at 32 on the down move Friday, ADX is still under 25, so range conditions still exit until proven otherwise by a rising ADX above 25. This week’s price action will tell a lot about the future direction of corn prices.
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.
