NFTRH+; This Commodity Has a Positive Seasonal, Contrary Sentiment Profile & Bottoming Technicals

[edit] I added WEAT after hours, after writing the update.

As I started taking a look into the Agricultural sector to see who is leading and who is dragging (GKX index is bearish) I noticed that Wheat has been destroyed since it hit 14.40 when the war began (current price: 6.50 and down another 5.3% today).

It, along with several other commodities got pumped and dumped on the big picture macro. Much like what happened to current holdings DVAX and PFE, post-COVID hysteria, the post-hype declines have been significant (and represent opportunity).

First off, the Seasonal for Wheat is positive, on average, through the rest of the year after having been negative over the first half of the year. Not the be all, end all, but I’d much rather have the seasonal in line – especially in the Ags – than not.

wheat seasonal

Commercial Hedgers are in a positive contrary sentiment alignment as they start to fade as Wheat has started to bounce.

The other side of the positive contrary sentiment coin is the public, still far from bullish about wheat.

The daily chart shows two hard spikes upward and two hard downs to follow. Frankly, I don’t care for MACD or RSI, but that is due to the incredible volatility would-be bottom feeders have had to endure. The latest pullback has so far held a support area.

wheat futures

The weekly chart shows support going back to 2019, which represents a brutal all-time low if my chart data is correct. If you like Wheat fundamentally, the risk/reward (aided by this most recent harsh pullback while trying to bottom) looks about as good as it gets from seasonal, sentiment and technical vantage points.

wheat futures

I am putting the Teucrium Wheat Fund (WEAT) on personal watch and cannot see why I would not add it promptly after today’s continued harsh pullback.

A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the technical parameters are already noted. These updates are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason) as I often do. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.