Palm oil neutral in 4,909-5,048 ringgit range, triangle unreliable

SINGAPORE: Palm oil looks neutral in a range of 4,909-5,048 ringgit per tonne, and an escape could suggest a direction.

The contract climbed above a triangle, which looks like a bullish continuation pattern, suggesting a target of 5,187 ringgit.

However, this triangle is the least reliable among all classical patterns.

Until the contract breaks 5,048 ringgit and surges above 5,101 ringgit, the target of 5,187 ringgit may not be available.

The speculation now is the contract may pull back towards the range of 4,909-5,048 ringgit first, before choosing its next direction.

On the daily chart, the contract faces a resistance at 5,024 ringgit.

A failure to break this level could signal the extension of the drop from the Oct. 21 high of 5,220 ringgit.

The worry for an extended correction is not groundless, as the candlesticks from Oct. 22 onwards look much smaller than the big black candle on Oct. 21.

Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.