SINGAPORE: Palm oil may rise to 6,602 ringgit per tonne, as it managed to stabilise around a support at 6,290 ringgit.
The contract failed twice to break the support, around which, a temporary bottom is developing. Unless palm oil breaks 6,290 ringgit, it is highly likely to retest the resistance at 6,602 ringgit.
A break below 6,290 ringgit could open the way towards 6,097-6,190 ringgit range. On the daily chart, a retracement analysis on the uptrend from 5,477 ringgit reveals a support at 6,353 ringgit, the 50% level.
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In the meantime, a projection analysis on the downtrend from 7,229 ringgit marks a similar support at 6,334 ringgit.
Either of these supports is strong enough to trigger a decent bounce. When working together, they become stronger.
A fall below the May 12 low of 6,270 ringgit may suggest a continuation of the downtrend towards 6,146 ringgit.
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