SINGAPORE: Palm oil may test a support zone of 4,926-4,960 ringgit per tonne, following its failure to break a resistance at 5,071 ringgit.
This resistance is identified as the 100% projection level of an upward wave c.
The level is crucial in evaluating the next direction, as the wave c could either end around this barrier or extend a lot to 5,251 ringgit.
The wave c is presumed to be over, as suggested by the strong reaction of the market on Nov. 19.
The drop from the Oct. 21 high of 5,220 ringgit may have resumed.
Based on this presumption, the contract may eventually fall below the Nov. 9 low of 4,706 ringgit.
A stabilisation of the price in the target zone could bring some hope for an extension of the wave c towards 5,251 ringgit.
On the daily chart, the contract failed to break a resistance at 5,024 ringgit, adding one more failure to previous many attempts.
The failure suggests the completion of a wave b, which will be reversed by a downward wave c in due course.
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.
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