Palm oil biased to break support at 3,089 ringgit

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SINGAPORE (Jan 16): Palm oil is biased to break a support at 3,089 ringgit per tonne and fall towards the next support at 3,014 ringgit, as it failed to break the upper trendline of a wedge.

The failure suggests an extension of the pattern, which may comprise five small waves. The final wave labeled e is unfolding towards 3,014 ringgit, the 86.4% Fibonacci projection level of a bigger wave C, which is the third wave of a three-wave cycle from the July 12, 2016 low of 2,186 ringgit.

Only a break above 3,169 ringgit could confirm the wedge, as a bullish continuation pattern, and an immediate target at 3,219 ringgit will then be established. - by Wang Tao, Reuters

(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.)