Corn futures triggered a breakout from the large Channel Up chart pattern illustrated here on the 240-minute time frame. The follow-through from the initial breakout has been erratic, however, leaving the market in a moment of indecision that will likely resolve itself during Wednesday's trading session.
The nearby corn futures initially penetrated the support trend line offered by the channel when the price dropped through $7.28 per bushel on strong momentum. A minor stabilization then began, largely attributable to the rebound in outside markets (stocks and currencies) which had been sharply lower when the grains sold off.
The current price action in corn shows the market is now hugging the trend line, and is now just above support. A recovery from the current level with a move back above $7.50 per bushel would negate the bearish forecast for the time being, indicating a false breakout occurred. Meanwhile, the retracement appears to be struggling to hold support. This encourages the likelihood of a continuation of the initial drop, with the forecast price projected to reach a minimum of $7.11 per bushel, with $6.86 also possible at the lower end of the range.
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