Palm oil may test support at 4,105 ringgit

SINGAPORE: Palm oil may test a support at 4,105 ringgit per tonne, a break below which could cause a fall to 4,022 ringgit.

A double-top forming around 4,498 ringgit confirmed a reversal of the uptrend from the June low of 3,251 ringgit. A retracement analysis on the trend reveals a target zone of 3,875-4,022 ringgit.

The drop from 4,498 ringgit also observes closely a set of retracements on the shorter uptrend from 3,711 ringgit. The bounce triggered by the support of 4,105 ringgit seems to have ended around 4,316 ringgit, as the contract failed twice to break this level.

Palm falls on weakness in rival oils

A break could lead to a gain into a range of 4,411-4,498 ringgit. On the daily chart, the drop from the July 30 high of 4,498 ringgit may consist of three waves.

The current wave c may travel towards 4,116 ringgit, where the wave a ended.

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