SINGAPORE: CBOT March corn failed to break a resistance at $3.85 per bushel, and may hover below this level or retrace to a support at $3.81.
The resistance and the support are identified as the 50 percent and the 38.2 percent projection levels of a wave C from $3.67-1/4. A correction triggered by the resistance may consist of three waves. The third wave labeled c could travel to $3.81.
A break above $3.85 will not be confirmed until corn rises above the Dec. 7 high of $3.85-3/4, while a break below $3.81 may cause a loss to $3.76.
It must be noted that compared to the wave A, the wave C looks too short to complete. The wave C is capable of traveling into a range of $3.89-1/4 to $4.03 eventually. However, it is almost an mission impossible to figure out how this wave C is constructed.
On the daily chart, corn faces a resistance at $3.86, the 38.2 percent retracement of the downtrend from $4.37 to $3.54-3/4. Corn failed to overcome this barrier twice.
A break above it could open the way to $3.96.
* 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.