SINGAPORE: CBOT March wheat may test a resistance at $5.19-1/2 per bushel, a break above which could lead to a gain to $5.23-1/4.
The resistance is established at the 38.2 percent retracement of the uptrend from $5.03-1/4 to $5.29-1/2. The deep drop from $5.29-1/2 looks like a pullback towards a falling trendline.
The pullback seems to have completed around the support at $5.09-1/2. The uptrend from $5.03-1/4 may have resumed. It is expected to extend towards $5.29-1/2.
On the daily chart, the bullish divergence on MACD indicates that the bounce caused by the support at $5.03-1/2 may extend. Driven by a wave C, the bounce may reach into a range of $5.25-1/2 to $5.33-3/4, formed by the 138.2 percent and the 123.6 percent projection levels of a downtrend from $6.04-1/4.
* 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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