SINGAPORE: Palm oil is expected to test a support at 3,796 ringgit per tonne, a break below which could be followed by a drop into a range of 3,683-3,721 ringgit.
So much of the bounce from 3,721 ringgit has been reversed that the downtrend from 4,276 ringgit could have resumed. The trend is riding on a wave C from 4,276 ringgit, which is capable of travelling to 3,500 ringgit.
A stabilisation of the contract around 3,796 ringgit may signal an extension of the bounce and the formation of a small inverted head-and-shoulders.
Resistance is at 3,888 ringgit, a break above which could lead to a gain to 3,980 ringgit. Such a gain would confirm the extension of the bounce towards 4,093 ringgit.
Palm oil drops 3pc as Indonesia keeps domestic sale rule
On the daily chart, the big black candlestick on Tuesday suggests a further fall on Thursday, towards 3,683-3,708 ringgit which triggered the bounce to the Jan. 30 high of 3,991 ringgit.
It might be safe to assume the continuation of a wave C from 4,276 ringgit, towards its ultimate target of 3,500 ringgit.
Comments
Comments are closed for this article.