Wheat futures spent most of Wednesday's trading session consolidating the gains from Tuesday's he rally, winding into a narrow range above the pivotal $7.00 per bushel price level. This action is typical after a major upswing, with traders taking profits after the 45-cent gain for the week.
Tuesday's rally also executed a breakout from a large Falling Wedge chart pattern, which suggests the mid-week sideways action may be a retest of the previous resistance level before the market once again resumes its rally.
The projected price target for the wheat futures calls for a continuation of the move to a level between $7.35 and $7.56 per bushel, which may initiate if the market can move above the current congestion area. A slide back below $7.00 per bushel would negate the signal, placing the price back inside the wedge and taking the short-covering momentum out of the equation for the time being.
Barring a reversal in Thursday's session, the overall strength of this breakout appears impressive, and follow-through to the target area would be anticipated to occur sometime ahead of the weekend, where shifting weather patterns are likely to drive further speculative buying ahead of next week's trade.
For further information on this and other Autochartist products, visit our website at www.autochartist.com