SINGAPORE: Palm oil may fall into a range of 5,606 ringgit to 5,744 ringgit per tonne, as it could have completed a bounce from the April 1 low of 5,477 ringgit.
The bounce failed to extend above a resistance at 5,966 ringgit, which is near the peak of a wave b and the upper channel line. The failure strongly signals a continuation of the downtrend from 7,268 ringgit.
A break above 5,966 ringgit may only lead to a gain limited to 6,104 ringgit.
On the daily chart, a doji formed on Wednesday.
It is a convincing reversal signal, confirming the completion of the short-lived bounce over the preceding two days.
Palm oil ends three days of losses
A retracement analysis on the uptrend from 4,245 ringgit suggests a possible completion of the downtrend around a key support of 5,400 ringgit.
The contract is short of one last drop towards this level.
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