SINGAPORE: Palm oil may break a resistance at 3,924 ringgit per tonne, and rise into 3,958-4,001 ringgit range.
The rise from 3,594 ringgit is riding on a wave c, which is expected to travel into 3,958-4,071 ringgit range.
A retracement analysis reveals a strong resistance at 4,194 ringgit, the 61.8% level, which should not be ignored.
This barrier will work together with the one at 4,001 ringgit to stop the rise and trigger a correction.
Depending on the depth of the correction, the uptrend may either resume or reverse.
Palm oil may retrace towards 3,707 ringgit
Support is at 3,846 ringgit, a break below which could be followed by a drop to 3,776 ringgit. On the daily chart, trending signals turned bullish, as the contract seems to have broken a resistance at 3,891 ringgit.
The break opened the way towards 4,070 ringgit.
The pattern from Sept. 8 looks like an inverted head-and-shoulders, which suggests a much higher target of 4,495 ringgit.