CBOT wheat bearish, may fall to $4.52

The drop indicates a continuation of the downtrend from the April 4 high of $4.77-1/2. The pattern from this high looks like a flag, which suggests a target around $4.36. This flag and the target will be confirmed when wheat breaks $4.55-1/4, the 86.4 percent projection level of a downward wave c.

A realistic target will be $4.52. A break above the resistance at $4.61-1/2 will make the pattern invalid, and a bullish target at $4.67-3/4 will be established accordingly.

On the daily chart, wheat approaches a support at $4.56-1/2 again, the 14.6 percent retracement on the downtrend from $6.30-1/4 to $4.27. This is the third time the contract tests this support. It may succeed in overcoming this barrier and fall towards $4.41.

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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. **