SINGAPORE (Feb 23): Palm oil may test a support at RM2,750 per tonne, a break below which could cause a loss to the next support at RM2,703. These supports are provided respectively by the 261.8% and the 300 Fibonacci projection levels of a downward wave 3 from the Feb 15 high of RM3,075.

The bullish divergence on the hourly MACD suggests the wave 3 has become very exhausted and may end in the range of RM2,703–2,750, which is also indicated by a falling channel.

A bounce from the current level may be limited to RM2,827.

(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.)