Corn futures are once again retesting the top end of a major trading range at mid-week, with the possibility of a breakout ahead of bullish weather forecasts going into the weekend. Corn has been marking time in a broad sideways range as critical development of the US crop progresses, with traders looking at technicals for guidance on long terms direction.
The sideways price action has consolidated the market into a large Flag chart pattern illustrated here on the 240-minute time interval. This pattern has confined all of the recent trading range despite significant intra-day volatility. Wednesday's large range and higher close places the price close to the upper boundary of the Flag formation, allowing for a potential rally above $6.91 per bushel to initiate a technical breakout.
If the rally continues, the move into the $7.00 handle could have dramatic follow-through given the crucial time period for this summer's growing season. Failure for this price swing to move above the resistance provided would suggest a continuation of the Flag chart pattern, with a probable retest of the lower boundary near $6.70 per bushel.
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