Wheat: The Grain futures complex has experienced a volatile trading week

The Grain futures complex has experienced a volatile trading week, with a sell-off during Thursday’s action in the CBOT Wheat futures making what could be a key technical move lower on the longer term charts. Wheat dropped precipitously into the close to breach the underside support of a very large Channel Up chart pattern, illustrated here on the 240-minute time frame.

The market is peeling back sharply from the price peak near the top of this channel on strong momentum, suggesting heavy profit-taking may continue in the near term. The long duration of the Channel Up chart pattern just breached by this selling pressure points to a high potential for a continuation of the down move. The Channel Up formation scores very high on all internal technical readings.

The projected price forecast from the breakout indicates a possible drop to between $5.92 and $.683 per bushel in the nearby Wheat futures. If this level is achieved it would do substantial technical damage to the long term bull market, and may precipitate a seasonal price slide into the Northern Hemisphere growing season.

(Source: http://www.fxstreet.com/technical/forex-strategy/daily-commodities-update-technical/2011/04/29/)