SINGAPORE: Palm oil may test a support at 1,986 ringgit per tonne, as it faces a resistance at 2,020 ringgit.
The support and the resistance are identified as the 100pc and the 61.8pc projection levels of a downward wave c from 2,075 ringgit.
The bounce triggered by the support was a bit stronger than expected. Despite the strength of the bounce, the wave c looks incomplete. It may eventually travel to 1,931 ringgit, as suggested by a wedge/pennant.
A break above 2,020 ringgit, however, could confirm the completion of this wave c. A bullish target range of 2,041-2,075 ringgit will be established accordingly.
On the daily chart, another projection analysis reveals a support at 1,971 ringgit, the 86.4pc projection level of a downward wave C from 2,896 ringgit. This support helped trigger the bounce from the June 12 low of 1,964 ringgit as well.
A rise above the June 13 high of 2,021 ringgit could signal the extension of the bounce towards 2,046 ringgit.
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