Red Lentil Analysis

Today, we will look at the weekly Red Lentil at Saskatchewan Plant price charts dating back to 1999.

****Click on the image to enlarge****

As the first chart demonstrates, the fall of 2021 brought a breakout above a long-term yellow trendline connecting the highs of 2008 and 2016 at $52 per cwt.

This breakout has since failed with the current price at 43.

While failed breakouts are common, we cannot rule out the possibility of the price regaining the 52 level.

I am bullish above the previous highs of 52 and bearish below.

The question is, Will the price regain the 52 level or has the red lentil market topped?

Let’s look at a lower timeframe to see if we find some clues.

The chart below shows the price action of the past five years in greater detail.

****Click on the images to enlarge****

As a market technician, I rely on Fibonacci retracement and expansion tools to identify levels of interest where the price often slows down or reverses. I have no idea why this happens; however, it does.

I calculated Fibonacci retracement levels using the 2018 low of 14.25 and the 2021 high of 57.5, finding that the price is currently between the 0.236 and 0.382 levels.

The chart identifies my key Fibonacci levels of interest that often act as support or resistance.

I also drew the green trendline connecting previous levels of support.

Often a confluence of indicators will add strength to these levels. In the case of my charts, the confluence would be the Fibonacci levels and the trendlines.

Again, I am bullish above the previous highs of 52 and bearish below.

I provide both the bullish and bearish Fibonacci levels from my calculations below.

BULLISH LEVELS OF INTEREST

(Take partial or Full Profits)

1. 67

2. 84

BEARISH LEVELS OF INTEREST

(Long entry or possible support level)

1. 48

2. 41

3. 36

4. 31

5. 23

I hope you enjoy this analysis, and I am interested in any feedback you can provide.