I received some great input from you
regarding last week’s round top/bottom formation assignment. Let’s continue
the same lesson this week as we look at the wheat market.
If wheat is to complete a rounded top
formation where would the neckline of the formation be?

Answer
Last week we looked at another possible
rounded top/bottom formation, this time in the wheat market. Remember a
rounded top/bottom has the neckline where the formation began. While there
are intermediate support and resistance areas you can trade from before the
neckline, the “true” neckline is always at the beginning of the formation.

Unfortunately the wheat market made a
serious rally last week so it looks as though our neckline target may not
be reached. However if the market does continue lower again, look to the
neckline as a probably longer term objective.
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