SINGAPORE: Palm oil may retest a support of 4,155 ringgit per tonne, a break below could open the way towards 4,039-4,083 ringgit range.
The final part of the rise was shaped into an expanding diagonal triangle, which looks very much like a top pattern, as suggested by the bearish divergence on the hourly RSI.
Even though the contract failed to break the support of 4,155 ringgit at its first attempt, the drop from the Feb. 24 high of 4,269 ringgit looks deep enough to suggest a reversal of the uptrend.
A break above 4,271 ringgit could lead to a gain into 4,311-4,343 ringgit range. On the daily chart, the contract faces a resistance zone of 4,209 ringgit to 4,276 ringgit.
Palm oil ends higher on strong exports
The uptrend seems to have been developing within a narrow channel, which indicates a correction towards 4,022 ringgit.
Without this correction, the rise simply looks unreliable.
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