WHEAT Technical Analysis | WHEAT Trading: 2019-04-11 | IFCM India
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WHEAT Technical Analysis - WHEAT Trading: 2019-04-11

Higher carryout and good crop prospect bearish for wheat

Wheat carryout was increased while demand lowered in April WASDE report. Will the wheat prices continue declining?

The USDA lowered wheat demand estimate in its monthly World Agricultural Supply and Demand Estimate released on April 9. At the same time it increased old crop wheat carryout by 32 million bushels to 1.087 billion. A day before the WASDE report USDA indicated wheat export inspections amounted to 9.8 million bushels, far short of the rate needed to meet USDA forecast with less than two months to go in the 2018 marketing year. A week before that US wheat yield estimate was raised in all but three states based on crop rating reports. Wheat supply estimates were improved also for Australia with rain forecast this week. Weak demand and higher supply estimates are bearish for wheat.

WHEAT is falling below MA(50) 04/11/2019 Technical Analysis IFC Markets chart

On the daily timeframe the WEHAT: D1 is below the 50-day moving average MA(50) which is falling, this is bearish.

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
  • The RSI oscillator has levelled off and is not in oversold zone yet.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 455.2. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the last fractal high at 478.0. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (478) without reaching the order (455.2), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

PositionSell
Sell stop Below 455.2
Stop loss Above 478.0

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This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

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