SINGAPORE (Sept 4): Palm oil may rise to 2,322 ringgit per tonne in a week, as suggested by its wave pattern and a projection analysis.
The uptrend from the July 25 low of 2,140 ringgit has not completed. Three waves drive this trend. So far, only two waves have unfolded. The third wave labelled C is capable of travelling to 2,322 ringgit, its 100 percent projection level. A double-bottom forming around 2,140 ringgit suggests a similar target.
This pattern signals a reversal of a the downtrend from 2,498 ringgit, or a longer trend from a higher level. A break above 2,274 ringgit will confirm the target at 2,322 ringgit.The break will make a much bigger sense on the long-term weekly chart, as it will not only open the way towards 2,375 ringgit, the 61.8 percent projection level of a downward wave (C), but also signal a completion of a bear market starting from the March 2008 high of 4,486 ringgit.
Support is at 2,245 ringgit (first chart), a break below which could cause a loss limited to 2,227 ringgit. - Reuters