SINGAPORE: Palm oil may fall to 4,822 ringgit per tonne, to complete a correction from the Oct. 21 high of 5,220 ringgit.
Three waves make up the correction. So far, only two have unfolded. The wave c is travelling towards 4,822 ringgit. This wave c could be much shorter than the wave a, probably to end around 4,822 ringgit, as a five-wave cycle from 4,032 ringgit looks incomplete.
A break above 5,048 ringgit, however, could overturn this wave count, as it will signal an extension of the cycle towards 5,187 ringgit.
On the daily chart, the contract is falling towards a range of 4,816 ringgit to 4,878 ringgit, following its failure to break a resistance at 5,024 ringgit.
Even though a flag suggests a bullish target of 5,350 ringgit, the bearish engulfing pattern still shadows the market psychology. Bulls may take some time to regain their momentum.
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