SINGAPORE (Jan 22): Palm oil may retrace to a support at RM2,198 per tonne, as it faces a resistance at RM2,227. The support and the resistance are identified as the 176.4% and the 200% projection levels on an uptrend from RM1,979.
A wedge has been confirmed as a bullish continuation pattern, suggesting a target around RM2,274. However, a pullback towards the upper trendline of the pattern is yet to occur. Most likely, this pullback will be triggered by the resistance at RM2,227.
A break above RM2,227 would lead to a gain into the range of RM2,245-2,274. On the daily chart, palm oil escaped from a falling channel. A duplicated channel indicates an aggressive target at RM2,431. Strategically, the target will only be available when palm oil breaks RM2,246.
(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.)