Corn futures opened the week strong after holding a key support levelon the chart during last week’s price correction. Monday’s swing higherconfirms the Channel Up chart pattern which has been holding thismarket up remains intact, and provides a clear point of entry forcapturing potential upside gains if the pattern continues.
This Channel Up chart pattern, shown here on the 240-minute timeinterval, has been developing since the March lows near $6.00 perbushel. The internal readings show a very high score overall, giving 9bars to both Uniformity and Clarity, with a 10-bar initial trend. Thishighlights the resilience of this particular Channel Up formation andsuggests the market may rally off of support to test the upperresistance band. This would set new highs for the Corn market wellabove $8.00 per bushel if achieved.
Long entries at this price level would have a very well defined exitpoint. If the swing low at the support established last week isviolated, it will signal a downside breakout from the Channel Up andnegate the bullishness of the current formation. So long as thissupport holds, however, the outlook is quite good for a continuationupwards inside the channel.
(Source: http://www.fxstreet.com/technical/forex-strategy/daily-commodities-update-technical/2011/04/26/)
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