SINGAPORE: Palm oil May contract may retest a resistance at 3,589 ringgit per tonne, a break above which could lead to a gain into a range of 3,624-3,662 ringgit.

The contract has climbed near the Jan. 7 high of 3,631 ringgit. The correction triggered by the resistance at 3,589 ringgit is regarded as an accumulation of the bullish momentum for breaking above 3,631 ringgit.

Support is at 3,526 ringgit, a break below which could cause a fall into the 3,465-3,496 ringgit range. On the daily chart, the contract is riding on a wave C, which was badly interrupted by the resistance at 3,634 ringgit.

Palm oil is expected to retest this strong barrier. However, it may fail again and start a much shallower correction than the former one from 3,631 ringgit.

Eventually, the contract could overcome this barrier and rise to 3,817 ringgit.

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