March corn futures are presently in a three-week-old down-trending channel drawn on the daily bar chart. Since the Jan. 17 contract high of $4.20 1/2, prices have been gradually fading to produce a series of lower daily highs and lower daily lows, to form the down-trending channel. The corn bears are also pointing to the posture of the Moving Average Convergence Divergence (MACD) indicator overlaid on the daily bar chart for March corn futures. The indicator has recently produced a bearish line crossover signal, whereby the MACD line crossed below the “trigger” line of the indicator.
Recent MACD line crossover signals on the daily chart have proven to be reliable buy and sell signals in corn. While the bulls may be wilting just a bit, no serious near-term chart damage has been inflicted on the market and the bulls still have the overall technical advantage as prices have not backed down that far from the recent contract high. Bulls can also argue that recent price action is more of a “pause” after the recent higher volatility that did produce the fresh contract high.
The bears would gain better downside technical momentum by pushing and closing March corn futures back below solid chart support at $3.93. The corn bulls would regain fresh upside technical momentum by producing a close above trend-line resistance at the $4.05 level.
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