Separating the Wheat from the Chaff
- Posted by Greg Harmon
- on September 6th, 2012
Wheat ($ZW_F) has been rising in price like all commodities this summer. But the chart shows that the summer move may have just been the first one. It is about to break out of a consolidation pattern after a move higher from a base at 675 to around 900, separating the wheat from the chaff. The break down would find potential support at 850 and 800 before a retracement lower to 675. The Relative Strength Index (RSI) has pulled back from a technically overbought condition and is falling while the Moving Average Convergence Divergence indicator (MACD) is fading toward a negative cross, both supporting this. But the break out higher would have a target of 1125, a level last seen in the 2008 season. And with that RSI still bullish and the action in the MACD still looking like a typical flag pattern, this is not far fetched. And have you seen what the fields look like? You think things are getting expensive now? You cannot afford to not watch this chart.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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