With tensions in Eastern Europe continuing to escalate, crude oil continued their advance above the 100-level on the chart. Yesterday’s rally produced a relatively new high above the previous peak around 102.25 from late March. As a result, the positive directional bias of this market remains strong as a result of the market’s ability to continue making higher highs and higher lows in price. Near-term momentum also looks strong as price breaks into new relative highs with the 20-period SMA (Simple Moving Average) above the 50-period, highlighting acceleration to the upside in the most recent price data.
Recent price action in crude suggests that the higher probability trade is on the long side of crude as price continues to look strong at these levels. Today’s EIA Petroleum Status report is set to be released at 9:30 am CT and could set the tone for today’s trading. Further strength in crude could encounter near-term resistance around the 102.86 area on the chart while local support can be seen from 102.00 – 102.18. A failure below here does have the potential to materialize into a more substantial pullback targeting technical support around the 101.00 area. Given the course of previous price action, crude oil prices will continue to look strong until proven otherwise.
Crude Oil, 30-minute Bar Chart (e-Signal)
After pulling back from its highs and remaining relatively quiet for a few days, corn looks to be on the verge of another upside breakout as prices rallied into the close yesterday to get back above the 500’0 level on the chart. Near-term momentum favors eh upside with the faster 20-period SMA above the 50-period and the RSI now back in the 80-40 range. In order for price action to sustain the recent positive momentum, price should remain firm above 500 and ideally produce a new high above 512’4 by the close of today’s session.
The intermediate-term structure of the market remains bullish with price actions maintaining higher lows and significant longer term support can be seen from 490’0 – 492’6. In the event of a pullback in corn, sentiment will remain positive above previously mentioned support band and corrective pullbacks could offer traders an opportunity to get long the corn market from a more favorable entry level. Near-term support can be seen at 502’4 with the only truly relevant level of resistance coming into play at the 512’4 level. Traders should continue to look for high probability setups on the long side of this market until price begins to show signs of technical weakness.
Corn, 30-minute Bar Chart (e-Signal)