Winnipeg (CNS Canada) – After hitting a contract high on Monday, April 9, the ICE Futures Canada July canola contract subsequently turned decidedly lower to form a key reversal pattern from a chart perspective.
July canola hit a high of C$539.50 per tonne on April 9, but settled right around where it started–near the lows of the day at C$536.70. With prices seeing follow-through selling on April 10, the activity paints the picture of a classic ‘shooting star’ candlestick pattern of a last-ditch frenzy of buying in an uptrend followed by a correction lower.
If speculators continue to exit long positions, possible nearby support levels include the 20-day moving average around C$529 per tonne followed by the 100-day around C$519.
However, the longer-term uptrend still remains intact despite the latest correction, with the next resistance above the C$539.50 high seen at around C$543 per tonne.
