SINGAPORE (Feb 25): Palm oil may break a support at RM2,237 per tonne and fall towards the next support at RM2,214.
These supports are identified as the 76.4% and the 100% projection levels of a downward wave c from RM2,311. This wave looks incomplete. It may eventually travel to RM2,214.
The bounce triggered by the support at RM2,237 is regarded as a pullback towards a rising trendline. The pullback could have completed.
A fall below RM2,237 will not only cause a loss to RM2,214, but also confirm a break below a support at RM2,249, the 23.6% retracement on the uptrend from RM1,940 to RM2,344.
Based on this retracement analysis, the wave c could extend to RM2,190. On the daily chart, the contract looks shaky around a support at RM2,246, the 86.4% projection level of a downward wave (C). A break below the support could open the way towards RM2,144.
A break above RM2,285 could lead to a gain to RM2,316.
(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.)