SINGAPORE: CBOT March wheat is expected to test a support at $5.15-1/2 per bushel, with a good chance of breaking below this level and falling to the next support at $5.12-3/4.
These supports are identified respectively as the 38.2 percent and the 50 percent retracements of the uptrend from $5.01-1/4 to $5.24-1/2. The drop from $5.24-1/2 consists of three waves which may make up a flat.
The pattern is characterised by its three component waves that are roughly equal in length. That means the current wave c could travel to $5.12-3/4.
On the daily chart, wheat faces a strong resistance at $5.23, the 61.8 percent projection level of an upward wave C from $5.01-1/4. The resistance is strengthened by another similar one established by a falling trendline.
The wave C failed a few times to travel above $5.23. Chances are it may end around this level.
* 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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