Wheat may be ready to begin a new trend upWheat, on an 8H chart, has broken through key short term resistance last week. Beginning 9/12, ADX had signaled a period of price consolidation which has lasted until 10/13 when price broke through resistance.
This price action and ADX consolidation is reflected on the daily chart too. It is possible that price may have more upside potential before a pullback happens and an entry long could be attempted
The weekly chart, though it has not broken out of resistance or have had it's TSI and RSI turn positive, these two indicators may be showing some key divergences looking at the 2014/09/22 low and recent 2016/08/29 low. Should these areas of divergence hold, i'm looking for the upper line of resistance to be challenged. A key thing to watch on the weekly ADX is if price does move up does the +DMI cross up over the -DMI and the ADX move up above 20. There are a couple of scenarios that can play out should this happen which include either 1) a new bull trend as upper resistance breaks or 2) a drop off of the upper resistance with the ADX above 20 and the -DMI/+DMI swap signaling a change in dominance.
Q: Is this the beginning of an up trend or just another spike on weekly to touch upper resistance? Hard to tell for now and weekly will hold answer over next couple of months.
For now , I'm looking to enter long with dec wheat call but waiting to see if price pulls back first. Ideally, on the 8H chart, the +DMI and -DMI converge toward each other briefly with price pulling back to moving averages.
