SINGAPORE: CBOT March wheat may retest a support at $5.08-1/4 per bushel, as suggested by its wave pattern and a projection analysis.
The drop on Tuesday confirms a completion of the bounce from the Jan. 2 low of $5.01-1/4 and a resumption of the downtrend from Dec. 13, 2018 high of $5.38-1/2.
The trend is driven by a wave C, which has briefly travelled below its 38.2 percent projection level of $5.10-1/4. It has a better chance of extending to $5.03-1/2.
This wave consists of a few smaller waves. The third small wave labelled c was disrupted by a support at $5.08-1/4, its 123.6 percent projection level. However, a wave c is seldom observed to end around 123.6 percent level. In most cases, it extends to 161.8 percent level.
Bigger picture on a long-term daily chart looks bearish. The first month contract has completed a three-wave cycle from $3.59-1/2. It is riding on a wave c from the Dec. 17 high of $5.37-1/2. This wave may travel to $4.76-1/4 in the first quarter.
* Charts are not available in reports received in email box through "Alert". To get charts, use the news code of TECH/C to retrieve the original reports.
** 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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