SINGAPORE (June 11): Palm oil may revisit its May 13 low of RM1,960 per tonne, as suggested by a retracement analysis.
The contract has briefly pierced below a support at RM1,997, the 76.4% retracement of the uptrend from RM1,960 to RM2,115. This is the last barrier towards RM1,960.
Wave pattern shows that palm oil is riding on a wave c from RM2,075. This wave is capable of travelling to RM1,986, its 100% projection level.
Once the contract falls to RM1,986, the break below RM1,997 will be confirmed. A bounce from the current level may be limited to RM2,019.
On the daily chart, palm oil has broken a support at RM2,009, the 114.6% projection level of a downward wave C from RM2,896. It is falling towards RM1,939.
(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.)