SINGAPORE (April 22): Palm oil may retest a resistance at RM2,227, as it has stabilised around a support at RM2,191 per tonne.
The support and the resistance are identified as the 50% and the 61.8% retracements of the downtrend from RM2,344 to RM2,038.
The contract is due for a sharp move, as two trendlines are contracting to a point. Most likely, it could rise strongly, as it seems to be riding on a wave C from RM2,038, which is the third wave of a three-wave cycle from the Nov 27, 2018 low of RM1,940.
On the daily chart, palm oil is poised to retest a resistance at RM2,246, the 86.4% projection level of a downtrend from RM2,896. A break could lead to a gain to RM2,321.
(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.)