SINGAPORE: Palm oil may test a support at 5,984 ringgit per tonne, a break below which could open the way towards 5,843 ringgit.
The contract is riding on a wave c, which looks unlikely to end around 5,984 ringgit, as it approached this level again after a weak bounce.
Instead, this wave may extend to 5,615 ringgit, its 100% projection level.
It may consist of five smaller waves. So far, only four waves have unfolded.
The wave 5 is travelling towards 5,615 ringgit.
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A break above 6,099 ringgit may lead to a gain to 6,213 ringgit.
On the daily chart, the gap forming between May 13 and May 17 represents an acceleration of the drop. It is classified as a runaway gap.
The wave (c) from 7,229 ringgit has little chance of completing around its 61.8% projection level of 6,122 ringgit, as palm oil closed far below this support on Wednesday.
More likely, this wave could travel to 5,438 ringgit.
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