SINGAPORE (Oct 7): Palm oil is expected to retest support at 2,142 ringgit per tonne, with a good chance of breaking below this level and falling more towards 2,055 ringgit.
The support is provided by the 38.2 percent Fibonacci retracement on the fall from the June 25 high of 2,511 ringgit to the Sept. 2 low of 1,914 ringgit, temporarily blocking the way towards the 23.6 percent level at 2,055 ringgit.
The sharp fall from the Sept. 30 high of 2,222 ringgit indicates a completion of the rebound from 1,914 ringgit, which could be further reversed. A dip below the Oct. 2 low of 2,137 ringgit will confirm both a break below the support and the bearish target at 2,055 ringgit, the 23.6 percent retracement.
** 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.