SINGAPORE: Palm oil may drop to 3,888 ringgit per tonne, following the completion of a flat pattern from the Jan. 25 low of 3,721 ringgit. The flat is characterized by its three component waves that are roughly equal.
The wave c seems to have topped around 3,980 ringgit.
The completion of the wave c would be followed by the continuation of the downtrend from 4,276 ringgit, which still rides on a big wave C that could travel to 3,721 ringgit.
A rise above 4,035 ringgit may confirm a double-bottom around 3,721 ringgit.
A bullish target of 4,276 ringgit will be established accordingly.
On the daily chart, a retracement analysis on the rise from 3,220 ringgit to 4,497 ringgit reveals a resistance at 4,009 ringgit, which is working together with the one at 3,980 ringgit to stop the gain.
Palm oil hits one-month closing high on supply worries
A harami cross was spotted, which formed between Wednesday and Thursday.
It signals a completion of the bounce from the Feb. 2 low of 3,728 ringgit as well.
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