SINGAPORE (Aug 2): Palm oil remains neutral in a range of RM2,187-2,218 per tonne, and an escape could suggest a direction.
The range is formed by the 61.8% and the 50% projection levels on a downward wave C from RM2,348. A break above RM2,218 will not only open the way towards RM2,249, but also confirm a double-bottom developing around RM2,144. The pattern suggests a target around RM2,287.
A break below RM2,187 will confirm the completion of a flat from the July 13 low of RM2,144. A bearish target at RM2,149 will be established then.
With palm oil rising to RM2,218, the bias seems to be towards the upside. Signals on the daily chart suggest a further bounce as well.
Palm oil has found a support in the zone of RM2,120-2,186, which is formed by the 100% projection level of a downward wave C and the July 12, 2016 low.
The stabilization around this zone indicates a completion of the wave C.
(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.)