SINGAPORE: CBOT December wheat may test a resistance at $5.74-1/2 per bushel, a break above which could lead to a gain to $5.88.
The resistance is identified as the 86.4 percent retracement on the downtrend from $5.88 to $4.90. Wave pattern suggests that wheat is riding on a wave 5, the fifth wave of a five-wave cycle from $4.90.
A rising trendline points at a target of the wave 5 around $5.88. On the daily chart, this cycle has been driven by a big wave C, the third wave of an uptrend from $4.68-1/4.
A projection analysis suggests that the wave C may extend to $6.09-3/4. A drop below $5.60 (first chart) could signal the extension of the correction from the July 26 high of $5.72-3/4 towards $5.50-1/2.
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Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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