Palm oil may test resistance at 3,524 ringgit

SINGAPORE: Palm oil may test a resistance at 3,524 ringgit per tonne, a break above which could lead to a gain to 3,610 ringgit.

The resistance is identified as the 50% retracement of the downtrend from 3,888 ringgit to 3,160 ringgit. The rise from the Jan. 26 low of 3,196 ringgit looks as fast as the fall from the 3,888 ringgit.

Despite its strength, the current rise may end in a wide range of 3,524-3,716 ringgit, as the fall from 3,888 ringgit adoped a five-wave mode, which suggests the second round of drop.

Support is at 3,438 ringgit, a break below which could cause a fall to 3,332 ringgit. On the daily chart, the contract has cleared a resistance at 3,431 ringgit, the 38.2% retracement on the uptrend from 2,691 ringgit to 3,888 ringgit. It may rise more to 3,606 ringgit, which is close to 3,610 ringgit (hourly chart).

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.