The last time we posted the Wheat futures contract we were using the continuation chart. On this occasion we are using the July only chart but the picture is very much the same with further splashes of red dominating the picture. We are however at a decent support area formed back in January. If we did take another dip we have very strong gap support down at 806 with a further cluster of lows in the 760’s. The overall picture is still bleak but there could well be a bounce on the way.
Indicators in Play
When a market opens cleanly above the previous days range we create what is known as a gap or a window. More often than not these gaps act as support, which is what we are expecting here at the 806 level. This gap support is given more weight by the fact there was plenty of work done around this area back in January.
Summary
We are still bearish here but expecting some sort of bounce soon. If this does occur then we will be waiting to sell back up at the 906 level with a stop should we close above that point.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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