By now everyone is more than aware of the serious drought hitting farmers in the United States.  The AG stocks have been on a mad tear with many good picks given on this very website from “The Fly” (CF is a favorite of mine, a leader).  The plight is serious and will have a ripple effect on many businesses next quarter.  For example, BWLD a favorite company of mine which is reporting this week I think will do well this quarter (good % of their sales coming from booze); the problem is these costs for chicken wings are going to soar even higher from already expensive prices so if they mention having to guide down for next quarter it’ll hurt the stock.

Let me get to the point though, as a trader who uses mostly technicals it’s interesting to see how this fundamental nightmare is playing out.  I brought up a weekly chart here which looks a bit messy. I rarely add Bollinger bands, but I like using them to show extremes on a chart.  You can see we’ve had consecutive weeks closed out of the upper bands.  Usually this signals some of sort pullback, but it hasn’t happened.  As a technical trader, this would look like a decent setup to short but we must remember technical analysis has it’s limits.  The fundamental drive in $CORN could continue sending this stock higher while being extremely overbought by standards of technical analysis.

Full disclosure: I have some NOV put options on $CORN, but only a small position to speculate as I completely understand this could continue much higher with real demand fueling this move.

$CORN weekly shows shooting star DOJI with consecutive weeks closing outside upper BB

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