SINGAPORE: Palm oil may bounce further to 3,931 ringgit per tonne, as suggested by its wave pattern and a falling channel. The chart was a bit distorted by a contract switch on March 17. Due to this distortion, market may not fulfil its target of 3,736 ringgit. Indeed, the contract only narrowly missed this target.
The strong rise triggered by the support at 3,773 ringgit strongly suggests the completion of a wave c. A bounce as big as the preceding wave b may have started, developing towards 3,931 ringgit.
A break below 3,773 ringgit may be followed by a drop into 3,690-3,736 ringgit range. On the daily chart, the contract may pull back towards the rising trendline, which establishes a resistance around 3,907 ringgit.
Palm drops to over six-week low on weaker rival oils
Most likely, the pullback could be limited to 3,907 ringgit.
A break below 3,721 ringgit could open the way towards 3,521 ringgit.
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