SINGAPORE (July 30): Palm oil may drop to a support at RM2,149 per tonne, as it failed to break a resistance at RM2,218.
The support and the resistance are identified respectively as the 76.4% and the 50% projection levels on a downward wave C from RM2,348.
This wave looks incomplete. It may travel to RM2,088 at its full capacity. The pattern from July 13 low of RM2,144 is regarded as a flat, which is a bearish continuation pattern.
A break above RM2,218 will not only open the way towards RM2,249, but also confirm a double-bottom developing around RM2,144. This pattern suggests a target around RM2,287.
(Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.)