Corn futures led the grain complex lower on Friday, with the price plunging below the $6.50 a bushel level and settling near the lows. Heavy selling for most of the week has carried the market to its current support level defined by the Channel Down chart pattern shown here on the 15-minute time frame.
Short term price action suggests a possible retracement back to the top of the channel near the $6.50 mark. This would follow the successful retest of the support at $6.35 seen in Friday's session. The rate of decline in the price has been severe however, and a short covering rally could easily trigger an upside breakout above the top of the channel.
Range-bound trade at the lower end of this downtrend would allow for swing trading between the $6.30 and $6.50 trend line levels, as the grain markets have largely detached from the fundamentals in recent trading in favor of moving in sympathy with stock and currency market fluctuations.
Continued weakness on Monday could breach the support as well, leading to another week of liquidation and a forecast target likely to be in the $5 handle for the first time this year.
For further information on this and other Autochartist products, visit our website at www.autochartist.com