SINGAPORE (Aug 29): Palm oil may rise to RM2,277 per tonne, as it has cleared a resistance at RM2,224.
The resistance is identified as the 23.6% retracement of the downtrend from RM2,498 to RM2,140. The next resistance will be at RM2,277.
The bounce from the Aug 27 low of RM2,197 suggests the completion of a flat from the Aug 8 high of RM2,265.
The flat is a bullish continuation pattern, to be followed by a round of rally similar to the one from RM2,140. This rally will be driven by a wave C, the third wave of three-wave cycle from RM2,140.
A projection analysis suggests that the wave C could travel into the range of RM2,274-2,322, formed by its 61.8% and the 100% projection levels.
A break below RM2,224, now a support, may cause a loss limited to RM2,197.
(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.)