by Jonah S. Ford
Chicago Wheat is setting up a Triangle pattern on the 30-minute chart in the December futures contract. The market has been in a tight sideways range since a sharp spike in grain prices caused by the October 8 th USDA crop report, which sent corn, soybeans and wheat into strong upward trends in the intermediate term. This type of consolidation is common after a market rallies into a new trading range.
This Triangle is showing signs of a reversal pattern, with the initial breakout from the pennant occurring in Friday's session. A reactionary bounce in price above trend line resistance towards the close found quick selling pressure, as evidenced by the \"wicking\" action of the tails on the 30 minute bars during that move.
The Initial Trend reading is low at 3 bars, as this is a countertrend corrective move and a more or less sideways contraction in the market. The Triangle itself is fairly well defined however, and is likely to either fulfill the anticipated breakout pattern or work out of the pattern in a sideways trading range, which will likely set up a longer term trading pattern on the Autochartist platform.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.