Feb 10, 2020 - Posted by Darren Chu, CFA of Tradable Patterns
Corn (ZC) is seeing profittaking to start the week as the market hesitates ahead of the highly anticipated Feb 11th WASDE. Significantly, although ZC is trying to bounce off upchannel support (on the daily chart), it is bumping up against what is arguably descending wedge resistance (on the weekly chart). Given the still fairly wide gap between wedge resistance and support, ZC could very well get rejected at wedge resistance and spend the next several months sliding lower towards wedge support. Of course, the descending wedge resistance line (on the weekly chart) would be of greater importance if the January high used to connect from the July 2019 high in drawing the resistance line stood out more (as opposed to being a relatively minor high). Conversely, the odds for the major bottoming effort remaining intact will rise if ZC bounces off the daily chart upchannel support post-WASDE. Any break of the upchannel support (on the daily chart) post-WASDE will likely set back the major bottoming at least another few weeks. The weekly and daily RSI, Stochastics and MACD are trying to bottom. I am looking to go long in the green zone (of the daily chart), and am targeting the red zone for Friday. The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter). Click here to read today’s technical analysis of Soybean, WTI Crude.
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About the author:
Before the launch of Tradable Patterns, Darren Chu, CFA, served as IntercontinentalExchange | NYSE Liffe’s country manager for Australia, India, and the UAE between July 2010 and January 2014, expanding his role to look after Liffe business development in APAC ex-Japan/Korea until his departure mid April 2014. His primary remit was developing relationships with Liffe clients, prospects and partners in the buyside (traditional and alternative asset managers), proprietary trading (high frequency algo as well as manual, point and click traders), bank, broker (institutional and retail), commodity trader and ISV community. Key futures and options promoted included European/London rate benchmarks such as the Euribor, Short Sterling, Gilts, London/European index futures including the FTSE and CAC, London soft commodities (Robusta Coffee, Cocoa, White Sugar), Paris (MATIF) markets (Milling Wheat, Rapeseed), and NYSE Liffe US markets with the MSCI EM, MSCI EAFE, gold/silver, Eurodollar, US Treasury and GCF Repo futures being the focus.
Previously, Darren was with the TMX Group | Montreal Exchange for 4 years, marketing Canadian futures and options across North America, London, Singapore and Hong Kong. Darren also launched and managed CMC Markets Canada’s Chinese marketing and sales team, along with educational offering. On the academic trail, Darren has been a frequent guest speaker at Canadian universities as well as an author of content for 3 derivatives courses offered by Canadian Securities Institute and mandatory for licensing of Canadian derivatives industry professionals.
Darren can be reached at: +65 8118 8840 or via email at darrenchu@tradablepatterns.com.