SINGAPORE (Aug 13): Palm oil may bounce further to RM2,272 per tonne, as suggested by its wave pattern and a ratio analysis.
The contract is riding on a wave c from RM2,179. This wave is capable of travelling to RM2,272, its 100% projection level.
A retracement analysis on the downtrend from RM2,498 to RM2,140 suggests a slightly higher target at RM2,277, the 38.2% level, as palm oil has cleared a resistance at RM2,224, the 23.6% level.
A double-bottom forming around RM2,140 indicates the target at RM2,277 as well. On the daily chart, a projection analysis reveals that the contract has broken a resistance at RM2,226 and managed to stay above this level, it is likely to rise to RM2,303, the 76.4% level.
A break below RM2,224 could cause a loss to RM2,192.
(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.)