HighGround Dairy Technical Commentary – November 18, 2013

CME Class III Milk Futures December Class III Milk broke down from recent congestion Monday and fell to a new six day low. Recent coiling action on the charts carved out a triangle pattern, and appears to be in the process of breaking down out of that pattern. The uptrend pattern remains intact until support at 17.70 comes out. January Class III Milk slipped to a new four day low Monday, but it was able to hold above 17.27 support. January prices formed an ascending triangle pattern, with defined resistance at 17.52. Uptrend line support comes in at 17.19 for Tuesday. Of concern is the triple bearish momentum divergence on the Relative Strength Index (RSI). This becomes a more bearish force on a breakdown below uptrend line support and targets a deeper downside correction.