SINGAPORE (Feb 14): Palm oil may keep hovering above a support at RM2,249 or bounce towards a resistance at RM2,285 per tonne, as suggested by a retracement analysis.
The support is provided by the 23.6% retracement of the uptrend from RM1,940 to RM2,344. The bounce triggered by the support may consist of three waves. The third wave labeled c is yet to unfold. Even though it is not very clear how strong this wave is, it may buy bulls a bit more time. Making this support stronger is another one at RM2,246, the 86.4% projection level of a downward wave (C) on the daily chart. Until palm oil breaks RM2,246, it may have a chance of bouncing towards RM2,321.
A break below RM2,246 could open the way towards RM2,144. A more realist target could be RM2,214 on the hourly chart, which is 61.8% retracement of the uptrend from RM2,134 to RM2,344.
(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.)