Fis technical - Grains 13-9-16...• MACD Bullish , the histogram is flat • S1 US$ 929 11/16 •...

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• Weekly Close US$ 980 ¼

• RSI 44

• MACD Bearish, the histogram is flattening

• S1 US$ 943 ¼

• S2 US$ 937

• R1 US$ 977 ¾

• R2 US$ 985

Verdict – Longer term momentum remains neutral, whilst the

shorter period stochastic is starting to show a bearish cross in an

oversold condition.

The technical range remains intact. Last week’s candle failed to

break the current resistance levels; intra week movements have

traded in the resistance zone, however the weekly close remains

below it.

We continue to see support on the 50 period MA and this is looking

more and more like a key indicator at this point.

Close above the US$ 985 level would suggest the bulls are gaining

control. If US$ 990 remains the high on the current weekly candle

this will become the next technical buy level.

A close below US$ 937 would have technical bearish implications

going forward.

Source Bloomberg

Soybeans November 16 - Weekly Soybeans November 16 - Daily

• Daily Close US$ 964 ¼

• RSI 41

• MACD Bearish , the histogram is flat

• S1 US$ 943

• S2 US$ 937

• R1 US$ 967 13/16

• R2 US$ 990

Verdict – The bullish three river morning star candlestick pattern that we

mentioned last week in conjunction with the oversold shorter period

momentum has resulted in a push back up to the technical resistance levels.

The break above the US$ 972 5/8 failed to hold as shorter period momentum

became overbought on the 20 period moving average, resulting in a failed break

out and a close back below the trend resistance line.

Shorter term momentum would suggest that we could once again try the

support zone of US$ 943 – US$937. A close below this zone would be regarded

as technically bearish from here.

Technical buyers should now be waiting for a close above R2 US$ 990 as this is

the recent pivot high.

Caution on any technical breakout if momentum is failing to make a new

high/low with the price action as this would suggest a bull/bear divergence is in

play and would suggest a false breakout in the market.

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Soybeans November 17 - Weekly Soybeans November 17 - Daily

Source Bloomberg

• Weekly Close US$ 947 ¾

• RSI 49

• MACD Bearish, the histogram is narrowing

• S1 US$ 912

• S2 US$ 903 ½

• R1 US$ 953 ¾

• R2 US$ 956 ¾

Verdict – A vert similar picture to the November 16 weekly chart,

having seen a test a rejection on the downside due to the bullish

hammer and positive momentum we failed to close above the

technical resistance level of US$ 953 ¾ level highlighted last week.

Longer term momentum remains bullish, though it is now starting

to level out. However shorter term momentum is now starting to

turn and could signal a further test of the downside support going

forward.

At this point the market remains range bound and neutral because

of it. Technical sellers will need to see a close below US$ 912 before

entering the market, but would need to be cautious of further

support at US$ 903 ¼.

For technical buyers US$956 ¾ remains the key breakout level, and

a close on the weekly chart is needed above here before entering

the market.


• RSI 50

• MACD Bullish , the histogram is flat

• S1 US$ 929 11/16

• S2 US$ 917 ¼

• R1 US$ 955

• R2 US$ 956 ¾

Verdict – The bullish technical pattern from last week in conjunction with

the shorter period momentum that we highlighted last week resulted in an

upward push through the technical resistance levels of US$ 932 and US$

937 ½.

The technical resistance that we highlighted on the chart last week at US$

955 has held, with US$ 955 being the current high.

The November 17 contract is making new high lows, but failing at this point

to make new highs. The shorter period momentum is looking overbought;

however the longer period momentum is now starting to turn higher. This

would suggest that any pullback is likely to be into support and we highlight

the 200 period moving average at US$ 929 11/16 as being a key level here.

Technical buyers will need to see a close above US$ 955 before entering

the market, whereas sellers will need confirmation below US$ 913



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Corn December 16 - Weekly Corn December 16 - Daily

• Weekly Close US$ 341

• RSI 39


• S1 US$ 325 3/8

• S2 US$ 314 ¾

• R1 US$ 364

• R2 US$ 390

Verdict – Short covering continues to be the order of the day on

the Dec 16 weekly chart as open interest continues to drop.

Last week we noted that we had the bullish hammer off a support

level on higher volume with shorter period momentum turning

bullish.

This all suggested higher prices should follow, and this has been

the case. However we highlighted the need for the next upward

move to bee on high volume, and unfortunately this is not the

case, and would suggest that it is lack of selling pressure rather

than buying pressure that is currently pushing the market higher.

The market has now based and US$ 364 would be the next target

in any upward move. A close above US$ 344 ¼ is now needed to

convince technical buyers that we have the potential to go higher.

A close below US$ 314 ¾ would have bearish implications going

forward.

• Daily Close US$ 339 ½

• RSI 43

• MACD neutral

• S1 US$ 322 ½

• S2 US$ 314 ¾

• R1 US$ 346

• R2 US$ 380

Verdict – Technically we looked short term bullish and this has been the

case. US$ 937 ½ was achieved, however we once again have failed to

break above the previous range resistance.

Longer term momentum is starting to turn upwards, however at 17 the

%D remains in bearish territory and bulls should be holding off at this

point.

Shorter term momentum has now crossed to the downside off the

resistance level on higher volume, and this would indicated that the

bears are willing to defend this area and highlight the importance of the

US$346 level.

Technically in the short term it looks like we could once again weaken.

We remain in range and US$ 322 ½ remains and important support,

however a new low at US$314 ¾ is now needed to confirm a technical

breakout.

For technical buyers US$ 346 remain key, and until this level is broken

bulls should remain on the side-line.

Source Bloomberg



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Corn December 17 - Weekly Corn December 17 - Daily

Source Bloomberg


• RSI 43


• S1 US$ 364

• S2 US$ 357 ½

• R1 US$ 383

• R2 US$ 386

Verdict –A good week last week on the Dec 17 corn. As

expected we once again tested the upside on bullish shorter

period momentum.

The upward swing on low volume is less convincing,

especially in its failure to break the resistance levels of US$

383 – 386 level which would suggest short covering (based

on open interest drop) rather than genuine buy side interest.

Longer period momentum remains neutral to oversold

whereas the shorter period momentum is currently moving

higher and is now just below the overbought zone.

Technical resistance at US$ 386 is the key level and until

broken buyers based on the longer term weekly chart should

remain on the side-line.

Likewise, with the range being set technical sellers will need

to see close below the recent low of US$ 358 ½ before

entering the market.

• Daily Close US$ 380 ¾

• RSI 54

• MACD Bullish, the histogram is narrowing

• S1 US$ 374 ¾

• S2 US$ 364

• R1 US$ 383

• R2 US$ 386

Verdict – Shorter term momentum has gone from bullish to bearish once

again after a 7 day rally.

Resistance at US$ 383 has held, with the daily chart forming a Doji cross on

high volume. This has bearish implications going forward and highlights the

importance of the resistance levels highlighted.

The recent technical breakout at US$ 373 ¼ will be interesting as we are

now above the 20 period and 50 period moving averages. If we reject this

level going forward it should put R and R2 under pressure. However a close

below it would suggest we should once again try the US$ 364 level.

Shorter period momentum on the higher volume and Doji cross would

suggest the support should be broken. It becomes interesting if it holds as it

means we will be going from short covering to genuine buying interest.

Bullish on a technical close above US$ 386. For the trend to go from neutral

back to bearish we would need to see a close below US$ 359 ½.



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Chicago Wheat December 16 - Weekly Chicago Wheat December 16 - Daily

• Weekly Close US$ 394 ¾

• RSI 28

• MACD Bearish, the histogram is flat

• S1 US$ 386 ¾

• S2 US$ 372

• R1 US$ 421 ½

• R2 US$ 449 ½

Verdict – very little upward momentum on the weekly chart

last week. More importantly what momentum we had was on

low volume which would suggest that there is no real

conviction in the upward move.

Momentum remains flat and oversold, with the bullish

divergence yet to materialise in any real form.

Technically this market remains bearish with trend resistance

at US$ 421 ½. At this point a break in the trend will not be

enough to signal buying intent, unless on high volume. And

there is a high probability that we could see a rejection from

this level.

Technical buyers will need to see a close above the US$ 449 ½

to suggest that there is upside conviction.

A close below the US$ 386 ¾ level would signal to technical

sellers to once again enter the market.

Point of note, any breakout on the downside will need to be on

very strong volume and increasing open interest, due to the

bullish divergence. Without this to support any breakout fresh

sellers need to be very cautious that they do not walk into a

bull trap.


• RSI 39

• MACD - Bullish, the histogram is widening

• S1 US$ 386 ¾

• S2 US$ 375

• R1 US$ 421 ½

• R2 US$ 449 ¼

Verdict – yesterdays close was on the highest volume since the

recent market bottom. However the shorter period bearish

momentum cross should have longs on alert that the market could

be about to correct.

There is a positive, the daily chart highlights the recent increase in

open interest on the upward move and this does have bullish

implications. This would also put longer period traders on alert for

the bullish divergence in the weekly chart mentioned.

Based on the increased open interest on the upward move, the

correction that looks imminent should mean the current low will

hold. However the previous range that was broken will now act as a

resistance none suggesting a lot more is needed to convince the

market that sentiment has really changed.

Technically a sell on a close below US$ 386 ¾. From a buying

perspective outside of short period swing trades we would need to

see a close above the resistance zone US$ 426 ½ - US$ 449 ¼.



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• RSI 30


• S1 US$ 473 1/4

• S2 US$ 435

• R1 US$ 500 ¾

• R2 US$ 534 ¼

Verdict – This is basically the same technical as last week, the

range is broken and we have still have a bullish divergence.

Buy volume is very light at this point and technical bulls, aware of

the resistance zone between US$ 500 ¾ and US$ 534 ¼ should

remain on the side-lines at this point until a new pivot high is

formed and broken, or the range resistance is broken.

Technically a sell below the US$ 473 ½ low, however again

caution on any sell entries due to the bullish divergence that is

currently in play unless the momentum indicator makes fresh

lows, or volume and open interest increase drastically.

• Daily Close US$ 487

• RSI 37

• MACD Bearish, the histogram flat

• S1 US$ 473 ¼

• S2 US$ 466

• R1 US$ 500

• R2 US$ 534 ¼

Verdict – The current upward swing is failing at the shorter period

average at a time that the shorter period momentum is starting to

show a bearish cross.

Recent candle patterns in the form of a hanging man, and a candle

similar to a shooting star (tail needs to be longer) on high volume would

suggest that we are once again going to test the recent lows.

A close above the recent high of US$ 490 ¾ would suggest the bulls are

going to take the market on and try and push back into the resistance

zone of US$ 502 ½ - US$ 519 ½.

A close below the US$ 473 ¼ would be regarded as technically bearish

for the market.

Chicago Wheat December 17 - Weekly Chicago Wheat December 17 - Daily



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Technical Analysis Glossary

Pivot Point

A point where the market makes a new high or low, before reversing in direction.

Trend Line

A directional line connecting pivot points.

Primary Trend

The main trend line over an extended period of time.

Secondary Trend

Distinct from but within the primary trend. Indicates recent trend.

Support

A previous market low where market participants have been prepared to enter long positions.

Resistance

A previous market high where market participants have been prepared enter short positions.

Range

An area between the support and resistance.

Relative Strength Index (RSI)

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine

overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be

overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.

Fibonacci Retracement

Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset

relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by

key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.

Moving Average Convergence Divergence (MACD)

A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is

calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the

MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the

crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator

for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would

suggest that the upward move could soon stall.



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Fis technical - Grains 13-9-16...• MACD Bullish , the histogram is flat • S1 US$ 929 11/16 •...

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