SINGAPORE: Palm oil may retest a resistance at 4,393 ringgit per tonne, a break above could lead to a gain at 4,494 ringgit.
The contract is riding on a powerful wave (3)-3, which is unlikely to be disrupted by a deep correction until it shows signs of completion.
The shallow correction triggered by the resistance at 4,393 ringgit may have ended around 4,281 ringgit. The uptrend may have resumed.
A break below 4,281 ringgit could cause a loss into the range of 4,169 ringgit to 4,231 ringgit. On the daily chart, the contract may have completed a pullback towards a former resistance at 4,301 ringgit.
It is expected to rise to 4,576 ringgit.
A further gain above this level is less likely, as the 161.8% level generally works as a strong resistance, which is also strengthened by another one at 4,486 ringgit, the 2008 high.
Most likely, a decent correction would occur in the range of 4,486-4,576 ringgit.
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