SINGAPORE: Palm oil may drop to 4,865 ringgit per tonne, due to the completion of a five-wave cycle from 4,291 ringgit.
The completion was confirmed by the deep fall on Monday, even though this fall was due to a contract switch on the third month continuous chart.
The drop has caused an irrevocable damage to the uptrend. On the most active April contract chart, palm oil faces a strong resistance at 4,965 ringgit, which has triggered correction towards 4,851 ringgit, slightly lower than 4,865 ringgit.
The bearish divergence suggests a slim chance of the contract to break 4,965 ringgit.
On the daily chart, the contract has pierced below a support at 4,933 ringgit, which looks unable to hold, as a big gap formed on Monday.
The gap signals a drastic swing of the market sentiment. Most likely, the contract would fall to 4,755 ringgit.
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