SINGAPORE (Jan 18): Palm oil is biased to break a resistance at RM2,198 per tonne, and rise into a range of RM2,227-RM2,245.
The resistance is provided by the 176.4% projection level on an uptrend from RM1,979. From the Dec 19, 2018 high of RM2,200, a wedge has been developing. This pattern may end very soon.
A break above RM2,198 would confirm the wedge as a bullish continuation pattern, pointing at a target at RM2,274.
On the daily chart, the rise on Thursday helped palm oil escape from a falling channel. A duplicated channel defines a price band of RM2,000-RM2,431. Strategically, the target at RM2,431 will only be available when palm oil breaks RM2,246.
A break below RM2,144 could confirm the continuation of the downtrend towards RM1,967.
(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.)