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CHICAGO: Wheat prices on the Chicago Board of Trade should continue their upward march following a much-needed correction on April 16, technical analysts said.

"The break we had the past two days had no followthrough selling. As a matter of fact, it was looked upon as a gift to those who feel this market could approach $7.00," said Andre DiMino, trading strategist with Apostle Capital Management.

CBOT soft red winter wheat prices ended sharply higher on Thursday with July wheat surging 28 cents at $5.67 a bushel after peaking at a new contract high of $5.68.

DiMino sees initial resistance at $6.15-$6.20 minimum, basis July.

"We are in a raging bull market," said John Gambino of JBG Technical Analysis.

On Tuesday, the market fell the 20-cent daily trading limit in several contracts, but has since rebounded strongly.

"Even if this market were overextended and vulnerable to a severe correction, what better day to have it happen than this past Tuesday with a limit-down move," Gambino said.

He noted the market filled the gap on Wednesday and immediately rallied.

Gambino said Wednesday's trading accomplished two things: it filled the gap on the daily charts and accomplished an Elliott Fourth Wave correction which relieved overextended conditions.

From an Elliott Wave perspective, the pullback from Monday's high basis July unfolded in three waves, satisfying the minimum requirements for completion of a correction, said Elliott Wave International World Commodity Outlook editor Jim Martens.

Gambino's intermediate term target is $6.12 basis July, which he characterized as conservative.

Analytics Research Corp president Hans Kashyap said July wheat could conceivably fall all the way to the $4.90 level and retain its larger uptrend.

"I am still bullish over the longer term. No question that the trend is clearly extremely strong on the upside, basis the weekly charts," he said.

Wheat established a technical base between June 1993 and April 1995, indicating the market has more upside potential for the next two years, Kashyap said.

"The fundamentals are so tough that you cannot be bearish on wheat," Gambino said. "In fact you don't even stay in the same room with anyone who talks about selling wheat or corn."-Reuter