SINGAPORE: Palm oil may test a support at 5,094 ringgit per tonne, a break below could open the way to 5,001 ringgit.
The contract looks very shaky around a resistance at 5,155 ringgit, as a five-wave cycle is ending and the bearish divergence on the hourly RSI suggests an exhaustion of the uptrend.
The rise on Thursday could be the final struggle of bulls. The contract is becoming technically weakest and vulnerable to bears' attacks.
On Tuesday and Thursday, market opened low but managed to close high. This pattern is creating an illusion that the uptrend remains steady and may extend above 5,220 ringgit.
Palm oil may test support at 5,002 ringgit
With the deep drop of the CBOT grains on Thursday, the bullish sentiment may evaporate on Friday.
On the daily chart, the contract faces a resistance at $5,220 ringgit, from which, a deep correction started on Oct. 21, 2021 and lasted for almost two months.
There is a good reason to believe that another round of deep correction could occur.
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