SINGAPORE (May 27): Palm oil may bounce more to RM2,049 per tonne, as it has broken a resistance of RM2,026.
The resistance is identified as the 200% projection level of a downtrend from RM2,218. The next resistance will be at RM2,049, a break above which could lead to a further gain to RM2,063.
The current bounce may be short-lived, as the fall from the May 21 high of RM2,115 has adopted a five-wave mode, which means palm oil would eventually fall below its May 24 low of RM2,018.
Indeed, on the daily chart, another projection analysis suggests a lower target at RM1,967, the 123.6% projection level of a downtrend from RM2,896. The current bounce could be a pullback towards RM2,034.
(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.)