Palm oil may retest support at 4,676 ringgit

SINGAPORE: Palm oil may retest a support at 4,676 ringgit per tonne, a break below which could cause a fall into 4,591-4,625 ringgit range.

The contract failed to break both a resistance at 4,812 ringgit and a falling trendline.

The failure suggests either a completion of the rise from the Dec. 16 or the formation of a temporary top.

Based on the depth of the deep fall from the Dec. 28 high of 4,796 ringgit, the contract may extend its loss below 4,676 ringgit.

A realistic target zone seems to be from 4,591 ringgit to 4,625 ringgit.

Immediate resistance is at 4,751 ringgit, a break above which could lead to a gain to 4,812 ringgit.

On the daily chart, a retracement analysis on the uptrend from 3,251 ringgit reveals a resistance at 4,755 ringgit, the 23.6% level, around which the uptrend lost its momentum.

The contract may retrace move into a range of 4,493-4,587 ringgit, or at least hover below the resistance for a few days.

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