SINGAPORE (Dec 7): The palm oil third-month contract may test a support at RM2,519 per tonne, a break below which could cause a loss to the next support at RM2,491.
These supports are identified respectively as the 138.2% and the 150% projection levels of a downward wave C.
A small head-and-shoulders in the circled part has been confirmed, suggesting a lower target at RM2,462. A moderate bounce may occur around RM2,519. The bounce will be regarded as a pullback towards the neckline of the head-and-shoulders.
Only a break above RM2,577 could signal the reversal of the downtrend.
(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.)