SINGAPORE: Palm oil may test a resistance at 3,861 ringgit a tonne, a break above which could lead to a gain to 3,945 ringgit.
Following its failure to break a support at 3,758 ringgit, the contract started a bounce, which could be as strong as either the one from the Dec. 8 low of 3,875 ringgit, or the one from Dec. 6 low of 3,865 ringgit.
The purpose of the bounce could be to partially or totally cover a gap forming on Monday.
A break below 3,758 ringgit would confirm the continuation of the downtrend towards 3,590-3,687 ringgit range.
On the daily chart, the contract is expected to pull back towards 3,891 ringgit.
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The downtrend may continue upon the completion of the pullback.
An inverted head-and-shoulders developing from the July 14 low of 3,489 ringgit is near completion.
The right shoulder is expected to end in the range of 3,522-3,647 ringgit.
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