Agricultural reports today were bullish for wheat. By the end of the day for grain futures, 14:20 ET, I observed the forming of a Morning Star candlestick pattern and a close over the 8ema. This was on substantial volume in a general up trend.
When looking at the chart, focus on the green annotations and the yellow Fibonacci range on the right side of the chart.
I see 3 good candidates for targets:
- Confluence of the 27.2% Fibonacci of the green range (832.59) and the 161.8% extension of the yellow range (834.5).
- AB=CD (856.75)
- 61.8% Fibonacci extension of the green range (865.25).
Starting with the most conservative target of 832. Using a Stop just under the swing low we just made. Specifically 761.
Summary:
Entry: 780 5/8
Stop: 761
Target: 832
Risk: 761 - 780 5/8 = -19.625
Reward: 832 - 780 5/8 = 51.375
R:R = 51.375/19.625 = 1:2.6, which is great.
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