In June the October hogs broke out above the head and shoulders bottom at a price of 8450, Futures Have slid down from 9050 in mid August and came right to that 8450 low today. We are very oversold here with Stochastics readings at 7 %, both live and feeder cattle held important support today and I do expect a bounce from the 8450 level for October hogs. We are currently trading at 8475 and support is solid between 8300 and 8325. Each point for hogs is $4 and the margin isn't too bad at $1600. I look for futures to test resistance at 9000 in the weeks ahead.
The Trade: Buy October Hogs at Market (currently 8475)
The Stop: Place a sell stop at 8295, risk is 180 points or $720 from 8475 to the stop
Objective: Place an order to sell the October Hog at 8990, $2060 from 8475 to 8990