SINGAPORE: Palm oil may test a resistance at 4,329 ringgit a tonne, a break above which could lead to a gain into 4,400-4,497 ringgit range. The contract has surged above a key resistance at 4,226 ringgit.
This surge significantly increased the chance of the downtrend from 4,497 ringgit to reverse.
The next resistance will be at 4,329 ringgit, which will be a big challenge to bulls, as it is strengthened by another one at 4,333 ringgit, the peak of the wave b and the Nov. 11 high.
A break below 4,226 ringgit could be followed by a drop into 4,058-4,142 ringgit range.
On the daily chart, the contract is expected to test a resistance at 4,331 ringgit, which is near 4,329 ringgit (hourly chart).
Palm oil may fail to break these resistances in its first attempt.
It is expected to start a correction towards 4,070 ringgit thereafter.
After so much rise from the Nov. 21 low of 3,787 ringgit, it is still too early to conclude that the right shoulder of an inverted head-and-shoulders has completed, as it looks too unsymmetrical to the left shoulder.