CBOT Wheat futures bounced Thursday after having pushed to new lows in Wednesday's session. This short term recovery may be significant, as there was a pronounced lack of follow-through selling on the initial weakness. Autochartist's key level indicator has identified the recent range as a attempt to hold the $6.48 per bushel level and the reversal from the $6.30 low suggests a continuation of this range.
Follow-through strength in Friday's session will bring about a retest of the $6.48 key level. A move above this resistance should encourage momentum traders to look for a move higher towards the top of the range near $6.75 per bushel. As buying strength reenters the market, the key level will act as a support level for proper stop-loss placement.
In the event of a failed retest at $6.48 followed by a reversal, a bearish trend would be anticpated. This could send the price to a new low, expanding the trading range to the downside with an eventual slide towards the $6.00 mark. Watch for breakout signals on the shorter term Autochartist emerging pattern time frames for additional guidance. For further information on this and other Autochartist products, visit our website at www.autochartist.com