Palm oil may retest support at RM2,651

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SINGAPORE (Oct 4): Palm oil December contract may retest a support at RM2,651 per tonne, as it could have completed a bounce triggered by this level.

The support is identified as the 61.8% Fibonacci retracement of the uptrend from the July 19 low of RM2,512 to the Sept 14 high of RM2,876.

Three waves make up the correction from RM2,876. The third wave, labelled c, is capable of travelling to RM2,579, its 100% Fibonacci projection level.

Another retracement analysis on the third month continuous chart reveals a similar target at RM2,609.

Resistance is at RM2,694, a break above which could lead to a gain to RM2,737.

(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.)