SINGAPORE: CBOT March corn is biased to test a support at $3.80-3/4 per bushel, a break below which could cause a loss to $3.75-1/2.
The support was provided by the 38.2 percent projection level of a wave C from $3.67-1/4. This wave has lost its bullish momentum after briefly travelling above the resistance at $3.85.
This wave could be broken down into five smaller waves, with a failed fifth wave labelled 5. Such a structure, along with a small rising wedge, suggests the wave C is ending in the resistance zone of $3.85 to $3.89-1/4.
Signals will turn very bullish only if corn breaks $3.89-1/4, as the break could confirm a bullish pennant and a target at $4.03.
A retracement analysis on the daily chart reveals that corn remains below a resistance at $3.86, the 38.2 percent level of the downtrend from $4.37 to $3.54-3/4. It has been consolidating below this barrier for so many days that it tends to fall towards $3.74.
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