LUMBER

Breakouts from consolidation ranges have always been powerful. The longer the time spent in the consolidation range the stronger the breakout is. Lumber is a perfect example of a range breakout where price has been consolidating for almost a year. Price could have breached the lower boundary of the year-long consolidation at 213 and also violate the 3 year-long uptrend but instead we have seen an upward breakout. As I always mention in my updates, it is always better to wait for a confirmation and the confirmation was a weekly closing outside the boundaries of the contracting range. With the RSI breaching 50 levels on the upside and price breaking out of its year-long consolidation range at 260 levels we can call the technical action on Lumber bullish and expect price to trade between 250 and 326 levels in the following months. Both the 200 day moving average at 240 levels the 3 year-long trend support at 250 levels should act as strong support during any pullback.