This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Tuesday, April 8, 2014.
Scanning my screens today and I am noticing bull pennants everywhere on corn and soybeans.
What is a bull pennant? The bullish pennant formation is found within the uptrend of a futures contract. It is called a bull pennant because it resembles a pennant hanging on a flag pole. Normally, a pennant formation is a continuation pattern with narrowing price action. This action usually follows a strong up move on the charts (the flag pole). After the strong move, the pennant typically is marked sideways price action back toward the lower trend line. Most of the time, the pennant should look like a small symmetrical triangle with lower highs and higher lows as the trend line approaches from the bottom.
Many traders play this pattern with a breakout strategy to the upside in mind as there is a higher probability of a continuation away from the direction from which prices came.
Here are a few more bull pennants, they exists everywhere in old crop beans and corn.
I don’t want to leave out the bear fans; they need a flag to wave too. Long term, the bears are liking this set up:
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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