SINGAPORE: Palm oil may bounce more towards 3,888 ringgit per tonne, following its stabilization around the support of 3,721 ringgit, the Dec. 12, 2022 low. The deep fall on Wednesday was sharp but deceiving.
Even though it briefly extended below a key support of 3,796 ringgit, the subsequent bounce from 3,721 ringgit strongly suggests a false break below 3,796 ringgit. The bounce from 3,721 ringgit to the Jan.
3 high of 4,276 ringgit was pretty decent. The current bounce is likely to extend into 3,888-3,980 ringgit range, even if it is going to be much weaker. A fall below 3,721 ringgit could be extended into 3,606-3,683 ringgit range.
Palm oil may test support at 3,683 ringgit
On the daily chart, the pause of the drop has much to do with a support at 3,708 ringgit. It is too bold to presume the development of a flat pattern, which suggests a rise to 4,196 ringgit. However, a realistic target zone of 3,859-4,009 ringgit might be easily fulfilled.
A break below 3,708 ringgit could open the way towards 3,521 ringgit.
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