SINGAPORE: Palm oil may test a resistance at 3,738 ringgit per tonne, a break above could lead to a gain into 3,783-3,855 ringgit range.
The contract has broken a resistance at 3,666 ringgit.
The next resistance will be at 3,738 ringgit. It may jump up to 3,738 ringgit when market opens on Tuesday, as a consequence of the strong gains of the overnight CBOT grains.
It must be noted that the downtrend from 4,350 ringgit has not reversed.
It is expected to resume upon the completion of the current wave (4).
Most likely, this wave would end in the resistance zone of 3,738-3,783 ringgit range, to be followed by a downward wave (5). On the daily chart, the contract is riding on a bigger wave (5), which may end around 3,489 ringgit or travel into a much lower zone of 2,540-2,963 ringgit.
The two small white candlesticks between Sept. 9 and Sept. 12 symbolize a weak bounce, rather than a reversal of the downtrend. Given that the contract has climbed above 3,647 ringgit, it is likely to edge up towards 3,891 ringgit.