Long Corn – October 11th, 2016

I put out a few StockTwit tweets on Corn last week, but I wanted to organize them into a post. So here we go.

Weekly Futures:

Screen Shot 2016-10-11 at 7.45.48 PM.png

Despite the sell off since the summer, we did not hit oversold and instead came down to be forming a double bottom with 2014 lows. I like that.

It goes further back if we check out the monthly:

Screen Shot 2016-10-11 at 8.36.19 PM.png

For my needs, I will be taking a position in the $CORN ETF. I see an inverse head and shoulders here, testing the neckline, along with some nice volume. I have scaled in and am long a position risking 1% of my capital.

Screen Shot 2016-10-11 at 7.46.40 PM.png

Price target? I am not expecting the moon on this. We do have the downward sloping 200 day moving average above. The 68.1% fibonacci extension gives us 393, ~15% higher. The 61.8% on $CORN equates to 21.40.

Screen Shot 2016-10-11 at 8.41.44 PM.png

The last aspect is how net long Producers & Users are. Almost as much as they were before the rally into the summer. I like that too.

Corn.png
Source: FreeCoTData

Seasonality does seem to be lining up accurate this year though, which could be a damper.

image.pngCorn’s been down since mid-June, just like the chart above. Maybe we don’t get a rally until the end of the year or maybe the producers & users are right and it comes sooner. Lets see.

Time is on my side when I take positions. If this doesn’t move by tomorrow, I am not going to close my trade.

Thanks.

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