SINGAPORE (Aug 24): Palm oil may fall to RM2,192, as it has broken a support at RM2,224 per tonne.
The support is identified as the 23.6% retracement of the downtrend from RM2,498 to RM2,140. The next support will be at RM2,192.
The current fall could be a part of a flat from the Aug 8 high of RM2,265, or a resumption of the downtrend from RM2,498. In either case, palm oil could drop to RM2,192 first. The contract slid below a falling trendline. This slide signals the previous break above the trendline was false.
On the daily chart, palm oil failed twice to break a resistance at RM2,262, the 76.4% projection level of a downward wave (C) from RM2,855.
The failure has caused a drop towards the support at RM2,185. A further drop below this support could confirm the extension of the wave (C) towards RM2,079.
Immediate resistance is at RM2,240, the 38.2% projection level of an upward wave C from RM2,192. A break above this barrier may lead to a gain to RM2,277.
(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.)