SINGAPORE: Palm oil may fall into a zone of 6,097 ringgit to 6,190 ringgit a tonne, as it shows little signs of stopping around a support of 6,290 ringgit.
Even though the uptrend from 5,477 ringgit consists many impulsive waves, the fall from the April 29 high of 7,229 ringgit is so deep that it strongly suggests a reversal of the trend. A rising trendline was broken.
The break confirmed the reversal. Unless the contract could stabilize around 6,290 ringgit and climb above the rising trendline on Tuesday, the chance of a fall to 6,097 ringgit will be very high.
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A break above 6,409 ringgit may open the way towards 6,602 ringgit.
On the daily chart, the uptrend from 5,477 ringgit looks confusing.
It could be a part of the bigger trend from 4,245 ringgit. However, palm oil failed to rise above the March 9 high of 7,268 ringgit.
Due to this failure, the uptrend could be a part of the correction from this high as well.
Even though the bigger picture remains unclear, the contract is poised to test a support at 6,190 ringgit, a break could open the way towards 5,918 ringgit.
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