SINGAPORE: Palm oil may test a resistance at 4,873 ringgit per tonne, a break above which could lead to a gain to 4,948 ringgit.

The contract managed to stabilize around a support at 4,751 ringgit. The stabilisation increases the chance of a rise into 4,873-4,948 ringgit range.

Support is at 4,751 ringgit, a break below which could confirm the continuation of the fall from the Dec. 8 high of 4,949 ringgit towards 4,555 ringgit, as pointed by a falling channel.

On the daily chart, the contract temporarily stays within the upper channel. It is at a crossroads.

A break below 4,698 ringgit will not only cause a fall to 4,587 ringgit, but also confirm a price zone defined by the lower channel.

It might be possible that the downtrend develops towards 3,936 ringgit if palm oil remains within the low channel for a few days.

A break above 4,878 ringgit will basically wipe out this possibility.

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