SINGAPORE (March 6): Palm oil may retest a support at RM2,117 per tonne, as it could have resumed its downtrend from the Feb 7 high of RM2,344.
The trend was disrupted by a bounce triggered by RM2,117, the 200% projection level of a downward wave c from RM2,311.
This bounce has been driven by a wave d, the fourth wave of the downtrend. The fifth wave labelled e is unfolding towards RM2,094, the 61.8% retracement on the uptrend from RM1,940 to RM2,344.
The trend has been developing within a falling channel, which suggests a target around RM2,035. Resistance is RM2,177, a break above which could lead to a gain into a range of RM2,191-2,214.
On the daily chart, a medium-term downtrend from RM3,202 remains intact. It is extending towards RM1,967, the 123.6% projection level of a downward wave (C).
(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.)