News & Analysis

COTD: GrainCorp Ltd (GNC) – August Wheat prices driving stock?

August 31, 2020
GNC.ax – Daily

GrainCorp Ltd  – (Daily)

Our Chart of The Day comes from the Australian ASX today, looking at GrainCorp Ltd (GNC.ax) using the daily time frame.

As a stock heavily linked to Wheat and commodity markets, it’s always a good idea to check out what’s happening in those spaces to understand potential goings-on behind the scenes that may influence price moves.

As we check the Wheat futures, you’ll notice a jump in Wheat since the beginning of August of approximately 14% over the last month. It may be more of a seasonal move as this soft commodity tends to be harvested late July in the northern hemisphere and given delays in production due to Coronavirus could have triggered increased demand.

Either way, the recent spike in Wheat prices has undoubtedly stirred up some bullish activity in GrainCorp stock with the stock also witnessing a rally last month, generating a high of $4.45 per share.

In terms of technical highlights, there a couple of things worth pointing out on this daily chart.

Firstly, note the general indecisiveness that creeps into this stock, as evident by the number of Doji candles formed in the past year, particularly the one that developed in May. All are labelled “D” on the chart. The last Doji occurred on Aug 26th and suggested buyers aren’t too confident above the recent highs, especially as it coincides with the top of a much longer range. We may be looking at $4.45-4.50, becoming a reasonable resistance level for the stock short-term.

The last point to mention is how well price action appears to respect both the 200-day moving average (blue line) and the monthly pivot levels, as shown in the chart above. In August, we saw the price bounce off the 200 MA support before finding steady resistance along the monthly pivot of $3.91. For those trading GNC, these indicators might be worthwhile considering during upcoming sessions.

For those interested in trading GrainCorp Ltd as a share CFD, Go Markets has this stock and many more, including companies from the ASX, NYSE, and the NASDAQ.

Note: Click on chart to enlarge.

 

By Adam Taylor CTEe

.@adamt_trading

Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg

Disclaimer: The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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