SINGAPORE: Palm oil may test a support at 5,984 ringgit per tonne, a break below which could open the way towards 5,843 ringgit.

The contract is riding on a wave c, which looks unlikely to end around 5,984 ringgit, as it approached this level again after a weak bounce.

Instead, this wave may extend to 5,615 ringgit, its 100% projection level.

It may consist of five smaller waves. So far, only four waves have unfolded.

The wave 5 is travelling towards 5,615 ringgit.

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A break above 6,099 ringgit may lead to a gain to 6,213 ringgit.

On the daily chart, the gap forming between May 13 and May 17 represents an acceleration of the drop. It is classified as a runaway gap.

The wave (c) from 7,229 ringgit has little chance of completing around its 61.8% projection level of 6,122 ringgit, as palm oil closed far below this support on Wednesday.

More likely, this wave could travel to 5,438 ringgit.