Palm oil may rise into 3,691-3,757 ringgit range

SINGAPORE: Palm oil may break a resistance at 3,602 ringgit per tonne and rise into a range of 3,691 ringgit to 3,757 ringgit.

The bounce on Tuesday was so strong that it may extend to the target zone on Wednesday to fill a gap forming on Monday.

Following such a strong move, the ultimate target of a downward wave C at 3,195 ringgit looks doubtful. It has been temporarily aborted, as sometimes a wave C may end around 138.2% level as well.

Support is at 3,506 ringgit, a break below could signal the completion of the bounce.

The contract is likely to fall into 3,351-3,447 ringgit range, if it opens below 3,602 ringgit on Wednesday.

On the daily chart, the bounce can't be a pullback towards 3,537 ringgit, as the big white candlestick on Tuesday signals a reversal of the downtrend from the June 3 high of 4,260 ringgit.

The contract almost reached a target of 3,232 ringgit after breaking 3,537 ringgit. Its close above 3,537 ringgit confirmed the break below this level was false.

It is a bit early to target 3,915 ringgit, as the following move largely depends on the performance of the market on Wednesday. The target will become valid if the contract could close high above 3,537 ringgit by end of this session.

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