SINGAPORE: Palm oil looks neutral in a range of 5,702-5,892 ringgit per tonne, and an escape could suggest a direction.
A break below 5,702 ringgit would confirm the continuation of the wave C towards 5,394-5,571 ringgit range, formed by its 100% and 86.4% projection levels.
On the chart of the September contract, a wave C from 6,454 ringgit seems to have completed around its 100% projection level of 5,647 ringgit.
Palm oil neutral in 5,702-5,892 ringgit range
The contract is supposed to bounce towards 5,837 ringgit.
Based on the closing price on Tuesday, the monthly spread between August contract and September contract is 120 ringgit.
When all these factors are reflected on the continuous chart, the contract may continue to consolidate in the range of 5,702-5,892 ringgit.
On the daily chart, the contract may have started a pullback towards a rising trendline. Most likely, it will open low and close high on Wednesday.
The pullback will have little impact on the downtrend which will remain intact and may eventually extend to 5,438 ringgit.
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