SINGAPORE (Feb 28): Palm oil may bounce to RM2,177 per tonne, as it has stabilized around a support at RM2,130.
The support is provided by the 186.4% projection level of a downward wave c. Strengthening this support is another one at RM2,142, the 50% retracement of the uptrend from RM1,940 to RM2,344.
The wave c has not completed. It consists of five smaller waves. The current bounce is driven by the fourth wave labeled 4, which will be reversed by a downward wave 5.
That means the support at RM2,130 will be retested in due course. A break below RM2,130 could confirm the continuation of the wave c towards RM2,094.
On the daily chart, the contract seems to be stabilizing around a support at RM2,144, the 100% projection level of a downward wave (C). This support joins hands with the two supports on the hourly chart to hold the fall for one or two days.
(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.)