SINGAPORE: Palm oil may test a resistance at 2,254 ringgit per tonne, a break above which could lead to a gain at 2,284 ringgit.
The resistance is identified as the 14.6% retracement on the uptrend from 1,916 ringgit to 2,312 ringgit. The contract seems to have stabilized around a support at 2,219 ringgit, which is strengthened by another one established by a rising trendline.
A drop below 2,201 ringgit could confirm a break below 2,219 ringgit and a target at 2,161 ringgit. On the daily chart, palm oil found a support at 2,219 ringgit, the 23.6% retracement on the downtrend from 3,202 ringgit to 1,916 ringgit. This support coincides with the one on the hourly chart.
Chances are it may hover above this support or resume its rally towards 2,407 ringgit. A break below 2,219 ringgit will not only cause a fall to 2,161 ringgit (hourly chart), but also open the way towards 2,104 ringgit.
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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
** No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.