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HighGround Dairy Technical Commentary – August 23, 2013

CME Class III Milk Futures October Class III Milk showed positive reversal action during the last two sessions. Thursday’s drive to a new low for the move followed by a rally attempt was the first show of strength this week. Friday’s gap higher open and wide range advance to a new four day high is another positive sign, which puts the near term bias in favor of the bull camp. Meanwhile, the intermediate term trend still points down, with downtrend line resistance coming in at 18.10, then the August 12th swing high of 18.34. In between these levels is the June and July trading range low of 18.25, which could be a magnet for a near term test. Support for the October contract stands at Thursday’s low (17.27) then the July 2012 gap zone of 16.88 down to 16.38.  

October Butter also showed bullish reversal action during the last two sessions. The July through August decline was more definitive and produced a slightly more oversold technical condition. Thursday’s bullish outside day reversal and Friday’s “gap and go” higher open to a fresh eight day high favors a near term retest of downtrend line resistance/50 day moving average level at 155.95 area. The near term bias for October Butter favors the bulls until this week’s low (141.00) comes out.

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