SINGAPORE: Palm oil may revisit its Oct. 22 low of 4,816 ringgit per tonne, as the bounce from this level is ending.
The bounce is classified as the second leg of the drop from the Oct. 21 high of 5,220 ringgit. A total of three waves make up the drop.
The current wave b may end below a resistance at 5,048 ringgit.
It will be totally reversed by a wave c. However, a five-wave cycle from 4,032 ringgit looks incomplete. It may resume upon the completion of the wave c.
Most likely, the wave c would end around 4,822 ringgit.
A break above 5,048 ringgit may lead to a weak gain to 5,101 ringgit.
On the daily chart, the bearish engulfing pattern forming between Oct. 20 and Oct. 21 casts a big shadow on the uptrend. Bulls may take a few days to illuminate the outlook.
The contract failed to break a resistance at 5,024 ringgit.
The failure marked the end of a short-lived bounce from the 4,816 ringgit.
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