HighGround Dairy Technical Commentary – October 29, 2013

CME Class III Milk FuturesJanuary Class III Milk saw a gap higher open during Monday’s session, with prices returning toward their October 16th high of 17.25. It appears that a measure of strength was seen in the deferred contracts, especially the January contract. The gap and go higher is a sign of strength, which adds to the validity of the uptrend pattern. The next area of resistance for the January contract comes in at the July 22nd swing high of 17.34. Upside targeting derived from the August trading range of 16.70 down to 16.30 targets a drive to 17.50. The uptrend pattern for the January contract has stiff support coming in at its uptrend line drawn from the September swing low, which has been tested on five separate occasions during the last six weeks, and comes in at 16.96 on Tuesday and 16.98 in Wednesday. There is also a shelf of support that comes in at a 50% retracement level of the September/October rally, which stands at 16.82.