SINGAPORE: Palm oil may test a resistance at 3,752 ringgit per tonne, a break above which could lead to a gain into a range of 3,801-3,834 ringgit.

The sharp rise on Monday confirmed an extension of the uptrend from 3,210 ringgit. Based on the speed of the current rise, the Jan. 6 high of 3,888 ringgit may be reached soon.

The wave structure from this high looks confusing. It consists of five downward waves and three upward waves. Even though this structure does not support a strong rally, palm oil has still managed to recover from its deep fall.

Regardless of the wave structure, the rally looks full of momentum. Support is at 3,673 ringgit, a break below which could cause a fall into a range of 3,545-3,624 ringgit.

On the daily chart, the uptrend looks intact and is extending towards a key resistance at 3,856 ringgit, the 100% projection level of an upward wave C from 2,691 ringgit.

An upper trendline suggests a target of around 4,301 ringgit, which will become available when palm oil breaks 3,856 ringgit.

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