SINGAPORE (June 20): Palm oil may retest a resistance at RM2,068 per tonne as it found a support at RM2,004.
The resistance is provided by the 38.2% retracement on the downtrend from RM2,235 to RM1,964. Working together with this resistance is another one established by a falling trendline.
The correction triggered by these resistances was quickly reversed. Such a reversal signals an extension of the uptrend from RM1,964, towards RM2,100. A break below RM2,028 may cause a loss to RM1,964.
On the daily chart, the contact may break a resistance at RM2,046, the 61.8% projection level of a downward wave C from RM2,235, following its failed first attempt. A break could essentially open the way towards RM2,118.
It seems that a medium-term bottom is developing around RM1,971. The first signal to confirm this bottom will be a break above RM2,118.
(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.)