Wheat Update May 2016 (D)
Created on Tuesday, 10 May 2016 00:37
Written by Austin Galt
We are looking for the price of wheat to make a large move to the upside once the next higher low is in place. I now believe that may just have occurred so let’s review the daily chart.
WHEAT DAILY CHART
The upper horizontal line denotes the previous swing high which price recently surpassed. This meant the recent high was a higher high and we now just need a higher low to confirm the new bull trend.
I am favouring this higher low to form above the previous higher low at $446 which is denoted by the horizontal line. Price just hit a low at $454.75 which may well be it.
The Bollinger Bands show price is nearly back to the lower band but I suspect it won’t actually hit it this time. Instead, I am looking for price to head back up and cling to the upper band as the uptrend really takes hold.
I have added Fibonacci retracement levels of the move from low into higher high. This correction has so far pulled up just shy of the 76.4% level so a deep retracement nonetheless which is common for the first correction in a new bull trend.
I have drawn a Fibonacci Fan from the low to higher high and price is now around support from the 76.4% angle which provided support retroactively for the first higher low. Price trading any lower low would likely see the 88.6% angle come into play. This si certainly possible but I’m favouring the low being in place as it stands currently.
The RSI made a new high which is bullish and while the MACD indicator is still bearish it has been trending up nicely for some time so that is something for the bulls to get a bit excited about.
So, I am bullish and believe now represents a good opportunity to get involved on the long side.