SINGAPORE: Palm oil is expected to stabilize around a support at 3,888 ringgit per tonne and test a resistance at 4,010 ringgit thereafter.

The support is provided by the 61.8% retracement of the uptrend from 3,495 ringgit to 4,525 ringgit.

It is strengthened by another similar one established by a rising trendline.

Together, these supports may stop the fall and trigger a decent bounce.

Increasing the chance of such a bounce is the stabilization of the overnight US grain market.

A break below 3,888 ringgit may not necessarily cause a fall to 3,738 ringgit.

A break above 4,010 ringgit could lead to a gain to 4,132 ringgit.

On the daily chart, a rising channel indicates a completion of the correction around 3,856 ringgit. A further fall could be unlikely.

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