IFC Markets - Analytics

    IFC Markets

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    Technical Analysis #C-WHEAT : 2015-03-27

    Bearish turn

    Let us consider the continious WHEAT futures on the H4 graph. The price breached the bullish channel lower boundary and the “Head and Shoulders” pattern bottom. Meanwhile, RSI-Bars shaped a sustainable bearish trend.


    That means that consolidation gave way to a volatile momentum, which may be strong enough to break through another support line at 500.2. It is typical that the latest ParabolicSar signal is located at the breached trend line. Allowing for this, we may assume that the market sees a new consolidated trend. A sell pending order may be placed at the support line, which is confirmed both by Donchian Channel lower boundary and Bill Williams fractal. As soon as this level is breached we will be looking forward to a new volatility boost. At the same time we are supposed to pay attention to oscillator signals: they should confirm the breakthrough by crossing 26%. If doesn't happen, it is recommended to move the Stop loss to the break-even point, because a false breakout is very likely.
    After pending order placing, Stop loss is to be moved every four hours, following Parabolic signals. Thus, we are changing the probable profit/loss ratio for our benefit.


    Position Sell
    Sell stop below 500.2
    Stop loss above 526.8

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