Jun Lian Hog (HEM26) futures present a selling opportunity on more price weakness.
See on the daily bar chart for June Lane Hog futures that recent price action has formed a potential bearish double top reversal pattern. Also notice at the bottom of the chart that the Moving Average Divergence (MACD) indicator has just produced a bearish line crossover signal, in which the blue MACD line has crossed below the red trigger line.
Fundamentally, selling in cattle futures (LEJ26) (GFJ26) markets will likely continue to provide spillover weakness into lean hog futures. Also, hog slaughter rates are expected to increase in the coming months. Also, serious risk aversion in the general market has likely hurt consumer confidence, which could mean less demand for red meat at the meat counter.
A move below the chart support at this week’s low of $108.35 in June Lyngham futures will give the bears more strength and become a selling opportunity. The lower price target will be $100.00, or below. Technical resistance, to lift the protective buy stop, is located at $112.025.
Important note: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point you to potential business opportunities. However, it is up to you to: (1) decide when and if you want to start any trades and (2) determine the size of any trades you can start. Any trades I discuss are speculative in nature.
Here’s what the Commodity Futures Trading Commission (CFTC) has to say about futures trading (and I agree 100%):
Commodity futures and options trading is not for everyone. It is a volatile, complex and dangerous business. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into these contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents that your broker provides you.
As of the date of publication, Jim Wyckoff had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
