Palm oil may drop to 5,702 ringgit

SINGAPORE: Palm oil may drop to 5,702 ringgit per tonne, driven by a powerful wave C.

This wave started at 6,698 ringgit.

It may either end around 5,892 ringgit or extend to 5,394 ringgit.

Its strong momentum apparently suggests an extension.

Strategically, the target of 5,702 ringgit will be available when the contract breaks the support at 5,892 ringgit.

Palm flops to two-month closing low

This support is strengthened by another one at 5,833 ringgit.

A stabilization of the price in the zone of 5,833-5,892 ringgit could signal the formation of a temporary bottom.

The target of 5,702 ringgit has to be aborted, as the contract may bounce towards 6,046 ringgit.

The bounce will look like a pullback towards a rising trendline on the daily chart.

This pullback is expected to end below 6,122 ringgit. The break below the trendline confirmed a reversal of the uptrend from 4,245 ringgit and the progress of a wave (c) towards 5,438 ringgit.