SINGAPORE (March 7): Palm oil is biased to break a support at RM2,140 per tonne, and fall to the next support at RM2,117, as the downtrend from the Feb 7 high of RM2,344 remains steady.
The trend was disrupted by a bounce triggered by RM2,117, the 200% projection level of a downward wave c from RM2,311.
There might be five waves to make up the downtrend. The bounce has been driven by a wave d, the fourth wave. The fifth wave labelled e is expected to travel to RM2,094, the 61.8% retracement on the uptrend from RM1,940 to RM2,344.
A falling channel suggests a lower target around RM2,035. Resistance is RM2,177, a break above which could lead to a gain into a range of RM2,191-2,214.
On the daily chart, a medium-term downtrend from RM3,202 remains intact, following the failure of the contract to break an descending trendline.
Five waves may make up the trend. The fifth wave labeled (E) is unfolding towards RM1,967, the 123.6% projection level of a preceding 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.)