Focus: Corn in Bullish Pattern
March corn went sideways last week during low trend strength conditions (ADX < 25); price dropped a mere 1/2 point to close at $3.90-4. Argentina, the world’s second largest corn producer, is currently experiencing a drought which may weaken the country’s exports and increase world demand. The strength of the downtrend showed progressive weakening prior to 2009 when the first +ADX peak occurred since July 2008. The daily chart of March corn also shows a developing flag or pennant pattern which would be bullish. Price is above the downtrend line, and a trend reversal to the upside is potentially setting up. Currently, the +DMI is above the –DMI, and a successful retest of last week’s low ($3.58) would increase the likelihood of a daily trend reversal to the upside with initial targets of $4.65 and $5.20.
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.
