The strong surge on Tuesday signals the completion of a five-wave cycle from $5.34-3/4. Wheat may extend its gain towards $4.68, the 38.2 percent retracement of the downtrend from $5.34-3/4 to $4.27.
A projection analysis on the cycle reveals a resistance at $4.55-1/4, the 223.6 percent level, which triggered a pullback towards a falling trendline. The pullback may end around $4.46.
On the daily chart, the huge white candlestick on Tuesday confirmed a reversal of the downtrend around a key support at $4.23-3/4, the 100 percent projection level of the wave C. An immediate target could be $4.69-3/4.
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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. **