SINGAPORE: Palm oil may bounce more towards 3,980 ringgit, as it has broken a resistance at 3,888 ringgit per tonne. The next resistance is at 3,980 ringgit, a break above which could lead to a gain to 4,093 ringgit.
The nature of the current rise remains a bit unclear. It is tentatively classified as the second bounce triggered by the support of 3,721 ringgit.
This bounce is expected to be much weaker than the first one from the Dec. 12, 2022 low of 3,721 ringgit.
As far as the bounce target is concerned, it has to be a step-by-step calculation.
Palm oil extends gains on bargain buying, ends higher
A break below 3,888 ringgit may be followed by a drop towards 3,796 ringgit.
On the daily chart, a retracement analysis on the uptrend from 3,220 ringgit to 4,497 ringgit reveals a break above 3,859 ringgit. The break opened the way towards 4,009 ringgit.
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