Live Cattle
April Live Cattle started the week on a sour note, selling off on Monday and Tuesday (making the low on Tuesday), before recovering and rallying the remainder of the week. The rally sent price past resistance at 117.825 and towards weekly trendline resistance at 118.70. The high was 118.25 and trade couldn’t overcome resistance as it dropped below it at the end of Friday’s trading session, settling at 117.60. Trendline resistance is at 118.35 next week and a breakout above the trendline could lead to a test of the January high at 121.45. Continued strength could push price towards resistance at 124.675. With the close below 117.825 resistance level, any weakness could lead to a test of the 8 WMA (116.025). A breakdown from the 8 WMA could lead to a test of trendline support at 114.70 and then the 21 (112.625) and 50 (112.475) WMAs.
Feeder Cattle
April Feeder Cattle had a breakout to the upside last week, rallying above the ledge formation and closing above the 8 (125.00), 13 (126.10), and 21(124.625) WMAs. The ledge and the MAs have been containing price for the past 5 weeks and the breakout took price to trendline resistance at 127.125. A rally above the trendline could lead price to test the January high at 131.75. The next level is at 133.00. Support comes in at the MAs and then 122.825 and then 120.30.
Lean Hogs
April Lean Hogs continues to consolidate as it had its second inside week candle in a row. Last week’s candle was the narrowest candle in the past 7 weeks. It is also trapped between the 8 (68.60) and13 (67.075) WMAs. A breakout above the 8 WMA could see a test of resistance at 70.00 and then 72.875. A breakdown from the 13 WMA could lead to a test of support at 64.90 and then 61.90.
For those interested I hold a weekly livestock webinar on Friday, March 17 at 3:00pm. If you cannot attend live, a recording will be sent to your email upon completion of the webinar.
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
bdicostanzo@walshtrading.com
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.