Corn futures kicked off the month of March on a bullish note, punching through the upper edge of its recent trading range to trigger a buy signal. The market had been trending lower to hold the traditional February Break tendency to drop to seasonal lows during that month. Autochartist identified this trending price action as a Channel Down chart pattern, with last week's rally completing the formation with a buy signal.
The first entry point for establishing long positions occurred with the successful retest of the Channel Down support near $6.48 per bushel. Buyers entered the market here and generated significant momentum as the price rose. This indicated a likely move to the upper resistance level near $6.55 per bushel, which would have capped the gains if the sideways to lower trend were still the dominant pattern.
The up-thrust in Friday's session violated the trend line and initiated a secondary buy signal on the breakout, confirming the rally now underway.
The projected price target generated by Autochartist suggests a continuation of the move to a minimum of $6.62 a bushel to complete the breakout. This may entrench the February sell-off as a seasonal low for the corn market, setting up for shorter term patterns to confirm further upside gains. A decline back into the channel would be needed to turn the chart back to neutral.
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