SINGAPORE (July 31): Palm oil is biased to drop to a support at 2,149 ringgit per tonne, as it failed to break a resistance at 2,218 ringgit.
The support and the resistance are identified respectively as the 76.4 percent and the 50 percent projection levels on a downward wave C from 2,348 ringgit.
Signals are a bit mixed while palm oil remains in the neutral range of 2,187-2,218 ringgit. A break above 2,218 ringgit will not only open the way towards 2,249 ringgit, but also confirm a double-bottom developing around 2,144 ringgit. The pattern suggests a target around 2,287 ringgit.
However, the bias seems to be towards the downside, as the wave C looks incomplete. It may travel to 2,088 ringgit at its full capacity. The pattern from July 13 low of 2,144 ringgit is regarded as a flat, which is a typical bearish continuation pattern.
A break below 2,187 ringgit will confirm the target at 2,149 ringgit. - Reuters