WHEAT runs into sellers around 549.50 for the third day in a row
Wheat (WHEAT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, WHEAT ended the week -2.64% lower at 544.50 after edging lower $0.25 (-0.05%) today. Trading $4.75 higher after the open, the contract was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (WHEAT as at Feb 14, 2020):
Friday's trading range has been $7.50 (1.38%), that's far below the last trading month's daily average range of $11.24. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for WHEAT. Prices continued to consolidate within a tight trading range between 538.25 and 550.50 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and one neutral pattern, the Doji. The last time a Southern Doji showed up on December 10, 2019, WHEAT actually lost -0.86% on the following trading day.
Prices are trading close to the key technical support level at 538.50 (S1). Prices are trading close to the key technical resistance level at 550.75 (R1). The market ran into sellers again today around 549.50 for the third trading day in a row after having found sellers at 550.50 in the prior session and at 549.00 two days ago.
Although WHEAT is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 550.50 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 538.25 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for Wheat. Out of 616 times, WHEAT closed lower 52.11% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.52% with an average market move of -0.34%.
With five out of the other seven Commodity Markets closing higher today, the ones that stand out on the positive side are COFFEE gaining 4.23% and CRUDE closing 1.4% higher. On the flipside the worst performers have been SUGAR closing -1.56% lower and CORN losing -0.39%. Read more