April Live Cattle futures have set up a picture-perfect falling wedge chart pattern, with Tuesday's price spike initiating a breakout. Autochartist has been tracking this pattern on the 240-minute time frame throughout its development. .
The falling wedge chart pattern began forming when the cattle market fell back from the all-time highs near $131.00 per hundredweight. The orderly decline that commenced from that top has led to a consolidation of the trading range until the market found key support at 123.80 per hundredweight. This set the stage for the next move higher and the Tuesday breakout. The overall quality of this chart pattern is ranked at 8 bars to encourage the potential for the completion of the pattern to unfold by achieving the target forecast. Renewed buying in Wednesday s session would send the market towards the minimum projected price of $128.22 to complete the breakout. This level would place cattle within a very close proximity to the previous top, and encourage momentum traders to continue pushing the price towards yet another high.
A failed breakout and slide below $123.00 would be seen as a strongly bearish development, though this outcome appears far less likely to materialize following Tuesdays strong showing.
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