SINGAPORE: Palm oil may test a resistance at 5,676 ringgit per tonne, a break above which could lead to a gain into the 5,749-5,794 ringgit range.
The contract is riding on an extended wave 5, which consists of five smaller waves. The powerful wave 5-3 is unfolding. The strong surge on Jan. 28 confirmed this wave.
This wave 5-3 could be much longer than the wave 5-1, to travel far above 5,676 ringgit. An estimated target zone will be from 5,868 ringgit to 5,986 ringgit.
A realistic target could be either 5,749 ringgit or 5,794 ringgit. Support is at 5,608 ringgit, a break below which could cause a fall into the 5,484 ringgit to 5,558 ringgit range.
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A correction from the current level may be limited to 5,425 ringgit. On the daily chart, palm oil is near a resistance zone of 5,641-5,821 ringgit.
Resistances established by the trendline have proved to be effective in triggering deep drops.
Whether the trendline could cause another one is still subject to further observation.
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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