Technical Analysis #C-CORN : 2016-10-28

Healthy demand for ethanol production supports corn

Corn prices advance with managed funds building long positions and ethanol production providing additional support. Will the price of corn continue rising?

On the daily timeframe CORN:D1 has been rising after hitting multi-year low at the end of August. The price has closed above the 200-day moving average MA(200).

• The Donchian channel is flat: no trend is indicated.
• The Parabolic indicator gives a buy signal.
• The MACD indicator is above the signal line and the gap is rising, which is a bullish signal.
• The stochastic oscillator is rising and but hasn’t reached the overbought zone yet.

We believe breaching above the last fractal high at 364.2, confirmed also by the upper Donchian boundary, will signify continuation of the bullish momentum. It can be used as an entry point and a pending order to buy can be placed above that level. The stop loss can be placed below the last fractal low at 351.8. After placing the pending order the stop loss is to be moved every day following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (351.8) without reaching the order (364.2), we recommend cancelling the position: the market sustains internal changes which were not taken into account.