SINGAPORE: Palm oil may retrace towards a support at 3,707 ringgit per tonne, following its failure to break a resistance at 3,858 ringgit.
The rise seems to have lost its momentum around this resistance, which could have triggered a pullback towards a falling trendline.
It is hard to classify the surge from the Oct. 14 low of 3,594 ringgit, which could be the continuation of the uptrend from 3,220 ringgit or the final thrust of bulls.
A break above 3,889 ringgit could lead to a gain to 4,008 ringgit.
On the daily chart, the contract is undergoing a consolidation, which is expected to be roughly symmetrical to the one between Sept. 8 and Sept. 21.
An inverted head-and-shoulders could be developing, which is a bullish pattern. It will be confirmed when the contract breaks 3,891 ringgit.
Palm oil may rise into 3,824-3,919 ringgit range
Readings on the hourly chart do not suggest an immediate break above. Instead, the indication is a fall towards 3,647 ringgit.
Assuming the two circled parts are roughly symmetrical, the current consolidation may extend within the range of 3,647-3,891 ringgit.
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