SINGAPORE (July 11): Palm oil may bounce to RM1,966 per tonne, as its fall seems to be suffering from an exhausted momentum.
The drop from the July 1 high of RM1,982 has been slowing down. It has been constantly disrupted by bounces. The contract could be preparing for a decent bounce. The bullish divergence on the hourly MACD suggests a due bounce as well.
On the daily chart, palm oil looks unable to break a support at RM1,929, the 100% projection level of a downward wave C from RM2,118.
This wave may end around either RM1,929 or a much lower level of RM1,812. The longer it hovers above RM1,929, the more likely it bounces towards RM2,001.
A break below RM1,929 could cause a fall to RM1,884.
(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.)