SINGAPORE: Palm oil may test a support of 3,418 ringgit per tonne, a break below which could open the way towards 3,344-3,363 ringgit range.
A bounce from the May 17 low of 3,368 ringgit may have completed, following the failure of the contract to break a resistance at 3,498 ringgit.
The bounce is presumed to be of the same degree to the one from the May 12 low of 3,550 ringgit.
Based on this presumption, the resistance at 3,498 ringgit could be the limit to the bounce, as suggested by a falling channel.
A break above 3,498 ringgit, which looks very unlikely in consideration of the deep drop of the overnight CBOT grains, may lead to a gain to 3,552 ringgit.
On the daily chart, the support at 3,368 ringgit triggered a bounce, which is classified as a market noise in the deep fall towards 3,055 ringgit.
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The fall from the May 9 high of 3,837 ringgit is considered as a continuation of the downtrend from 4,425 ringgit.
The trend may eventually extend to 3,055 ringgit, as suggested by a projection analysis.
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