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CORN Technical Analysis - CORN Trading: 2015-03-24
Considering buying Corn
We would like to draw your attention to the CORN futures H4 chart. In the previous overview we pointed out that increase and decrease were equally probable. Eventually, due to the strengthening dollar, corn quotes declined but now they start growing again. We are considering buying the futures. This decision may be confirmed by the dropping dollar and estimated drought in the US. Grain crops may show a sharp growth in the future because of the potential onset of El Niño this year. Competent weather agencies haven't released forecasts yet but anything is possible. We remind that El Niño was last seen in 2010. The natural phenomenon boosted food prices back then. On March, 26 US Department of Agriculture (USDA) will publish a weekly report on food export. It may dramatically affect corn, wheat, soy, cotton and beef quotes.
Let us consider the CORN futures on the H4 time frame. It is traded in a mid-term range. The graph has recently shaped a triangle figure and continued moving down. However, there were no significant drop and corn returned into the neutral trend rather fast. RSI-Bars latest signals rebounded from the overbuy zone which is located above 70. At the same time the oscillator didn't breach 50. Donchian Channel expanded and the curve reached its upper boundary. The Donchian upper level is above 200-day moving average (MA 200). We do not rule out further bullish momentum if the latest bar of the CORN futures closes above the “old triangle” - 395. A pending buy order may be placed there. Stop loss may be placed at MA 200 level which can be considered as a support line – 387.9 mark. After pending order activation, Stop loss is to be moved every four hours near the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets stop loss level without reaching the order, we recommend cancelling the position: market sustains internal changes which were not considered.
| Position | Buy |
| Buy stop | above 395 |
| Stop loss | below 387,9 |
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