SINGAPORE (March 18): Palm oil may gain more to RM2,142 per tonne, as it has cleared a resistance at RM2,094.
The resistance is identified as the 61.8% retracement of the uptrend from RM1,940 to RM2,344. The next resistance will be at RM2,142, a break above which could lead to a further gain to RM2,190.
The strong recovery of the price from the March 15 low of RM2,038, along with the five-wave structure of the downtrend from RM2,344, suggests a reversal of the downtrend.
Another retracement analysis on the fall from RM2,344 to RM2,038 reveals that the contract has cleared a resistance at RM2,110, the 23.6% level. It is heading towards RM2,155. On the daily chart, palm oil has found a support at RM2,034, the 114.6% projection level of the downtrend from RM2,896. It has risen above a resistance at RM2,091 as well. Chances are it may gain further into the range of RM2,144-2,246.
(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.)