Palm oil may retest support at 5,106 ringgit

SINGAPORE: Palm oil may retest a support at 5,106 ringgit, as it faces a resistance at 5,174 ringgit per tonne.

The rise from the Jan. 14 low of 5,047 ringgit was so strong that it extended above the Jan. 13 high of 5,164 ringgit.

It could have been riding on a wave 5, the fifth wave of a five-wave cycle from 4,291 ringgit.

This wave could become a failed fifth wave, to end around 5,174 ringgit, or extend a lot to 5,366 ringgit. All depends on the behaviour of the market over the next one or two days.

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A break below 5,106 ringgit may signal a completion of the wave 5.

A bearish target range of 4,982 ringgit to 5,056 ringgit will be established.

A break above 5,174 ringgit could lead to a gain into the 5,220-5,292 ringgit range.

On the daily chart, the contract faces a strong resistance at 5,170 ringgit, the 261.8% projection level of an upward wave (C) from 1,939 ringgit.

The contract is supposed to retrace deeply, same as it did in October last year.

A rise above 5,220 ringgit, however, could signal an extension of the uptrend towards 5,350 ringgit.

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