CORN

Rising wedge or bearish wedge begins wide at the bottom and contracts as prices move higher. Prices are expected to move in trends and form parallel trend channels. However, when price loses momentum on the upside, it fails to reach the upper boundary of the trend channel. This type of price action is due to sellers being more aggressive than buyers. As a result bearish wedge pattern forms with contracting trend lines. Opposite is true during a downtrend where price fails to reach the lower boundary of the trend channel and forms a falling wedge (bullish wedge).

Since October 2011, Corn price has been moving upwards in a choppy trading range. The slope of the uptrend is extremely weak and suggests a possible “major” breakdown to lower levels in the following weeks. Over the past 6 months corn has formed a bearish wedge pattern and failed to stabilize above the long-term moving average (200 day exponential moving average). RSI has also failed to sustain its move above 50 levels. Technical data suggest lower prices towards 500 levels in the coming weeks/months.