SINGAPORE: Palm oil looks neutral in a narrow range of 3,945-4,029 ringgit a tonne, and an escape could suggest a direction. The contract seems to be consolidating within a triangle, which will be confirmed as either a bearish or bullish continuation pattern upon its completion.
Given that it appears after a fall from 4,300 ringgit, it is highly likely to turn out as a bearish continuation pattern.
A break above 4,029 ringgit could lead to a gain to 4,132 ringgit while a break below 3,945 ringgit may cause a drop to 3,861 ringgit.
Signals on the daily chart look mixed as well, because the contract is stuck in a neutral range of 3,891-4,070 ringgit.
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Wave pattern suggests a downside bias, as a wave C looks incomplete.
Furthermore, the right shoulder of an inverted head-and-shoulders from the July 14 low of 3,489 ringgit has not finished yet. It is expected to extend towards 3,522-3,647 ringgit range.
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