Conclusion, Investment Implications, Strategy
The Teucrium Corn ETF (CORN) is amid favorable conditions to resume its October 2020 major uptrend from Tactical support near 21.46, which it has recently broken out above. A sustained rise above the 21.46 area would target an additional 17% rise to 25.50. This is an Asbury Momentum trade idea.
Analysis and Rationale
The Teucrium Corn Fund (CORN) seeks to have the daily changes in the Shares’ NAV reflect the daily changes of the price of corn for future delivery, as measured by the Teucrium Corn Index. The Benchmark is a weighted average of the closing settlement prices for three futures contracts for corn that are traded on the Chicago Board of Trade. Under normal market conditions, it is expected that 100% of the fundâs assets will be invested in Benchmark Component Futures Contracts and in cash and cash equivalents. The fund seeks to achieve its investment objective by investing in Benchmark Component Futures Contracts.
The rightmost green highlights in the upper panel of Chart 1 below point out that CORN rose above its red May 7th downtrend line on Nov 23rd to indicate its larger 2020 advance has resumed. The chart also shows that CORN is above its 50- and 200-day moving averages to indicate both its minor and major trends are up. Meanwhile, the green highlights in the lower panel show that the daily relative performance line between CORN and the S&P 500 has recently risen above its 63-day moving average to indicate an emerging trend of quarterly (our Strategic time frame) relative outperformance versus the broad US stock market.
Combined, these conditions suggest a new Tactical buying opportunity within CORN’s larger October 2020 major uptrend. A sustained rise above the 21.46 to 20.60 area would help to confirm this and would target an additional 17% rise to 25.50.
Chart 1
Table 1 below shows that considering a 25.50 upside target and a protective stop placed below the 20.69 area, a long entry price of 21.85 would provide a 1:3.1 risk/reward ratio (risking $1.00 to make $3.10) with an initial risk of 5.3%.
Table 1
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