SINGAPORE: Palm oil may retest a resistance at 3,498 ringgit per tonne, a break above which could lead to a gain to 3,563 ringgit.
The contract managed to stabilise above a support at 3,389 ringgit on Monday, after opening sharply lower. The deep drop of CBOT grains on May 19 seemed only to have exerted impact during the first trading hour.
Palm oil has ever since regained its own rhythm and posture, to slowly but consistently claw back some of its loss from the May 15 high of 3,698 ringgit.
If the intermarket relation between CBOT grains and palm oil still works well on Tuesday, a big jump of the price to 3,498 ringgit at open could be highly likely.
Support is at 3,389 ringgit, a break below which could open the way towards 3,344-3,363 ringgit range.
On the daily chart, the support at 3,368 ringgit has held for a few days.
In considering that a decent bounce has been missing from the May 9 high of 3,837 ringgit, the flat consolidation in the range of 3,368-3,454 ringgit could be nursing such a bounce.
First bounce target will be 3,556 ringgit, as it is not very certain if the bounce would be strong enough to extend to 3,722 ringgit.
A break below 3,368 ringgit could be followed by a drop to 3,288 ringgit.
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