SINGAPORE: Palm oil may revisit its April 28 low of 3,484 ringgit per tonne, as it has broken a key support of 3,363 ringgit. The break confirmed a continuation of the downtrend from 3,837 ringgit.
Even though palm oil closed exactly at 3,363 ringgit on Tuesday, the break still looks convincing, as market may maintain its momentum to open sharply lower on Wednesday.
A close of the price above 3,363 ringgit on Wednesday would make the break invalid.
A bounce target of 3,418 ringgit will be established then. On the daily chart, the contract has pierced below a support at 3,368 ringgit, the 7% retracement on the fall from 4,425 ringgit.
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The consolidation above 3,368 ringgit could have completed and the downtrend from the May 9 high of 3,837 ringgit resumed.
The trend observes closely a set of projection levels on the fall from 3,980 ringgit.
The projection analysis suggests a target of 3,055 ringgit.
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