Wheat futures set up a buy signal in Wednesday's session after following the grain complex higher. South American weather concerns remains the driving force behind the recent technical strength, increasing the prospects for major price swings in what is often a relatively quiet trading season for the grains. Wheat's strong close above resistance, shown here on the Autochartist 240-minute time frame, suggests the upswing may only be getting started.
The breakout completes the Triangle chart pattern to signal increased buying interest above the previous narrowing range. The expansion of the range shifts the market into a broadening range with an upward bias, indicated here by the forecast area. The patterns scores 7 bars in overall Quality, and the breakout occurred on a maximum 10-bar measurement with the price settling at the highs of the day. This portends follow-through buying in Thursday's session is likely.
The projected price target for the nearby Wheat futures points to a minimum of $6.57 per bushel with a maximum of $6.78 per bushel based upon the Triangle breakout. A retracement back below $6.30 per bushel would be needed to negate the buy signal in the short term.
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