SINGAPORE: Palm oil may retest a support at 4,177 ringgit a tonne, a break below which could open the way towards 3,994-4,072 ringgit range.
The deep fall on Wednesday confirmed a reversal of the uptrend from 3,220 ringgit. A retracement analysis reveals a target zone of 3,847 ringgit to 3,994 ringgit.
The support at 4,177 ringgit triggered a bounce, which is classified as a pullback towards a rising trendline.
The pullback is expected to end in the range of 4,264 ringgit to 4,311 ringgit.
A break above 4,311 ringgit may lead to a gain to 4,368 ringgit.
Palm oil may retest support at 4,264 ringgit
On the daily chart, the right shoulder of an inverted head-and-shoulders has started to develop towards 3,522 ringgit, assuming that it is roughly symmetrical to the left shoulder.
Wave pattern indicates such a drop as well, as the bottom of the wave ii is around 3,522 ringgit.
The journey towards 3,522 ringgit could be rough, somehow mirroring the rise from the July 14 low of 3,489 ringgit.
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