Palm oil may slide more to RM2,782

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SINGAPORE (Nov 1): The palm oil January contract may slide more to RM2,782 per tonne, following its failure to break a resistance at RM2,860.

The resistance is established at the Sept. 14 high. The wave pattern shows that the drop seems to be driven by a wave 4, the fourth wave of a five-wave cycle from Oct. 11 low of RM2,685.

This wave could be as big as the former wave 2, to travel to RM2,800, as suggested by a rising channel. Logically, a drop to RM2,800 will confirm a break below RM2,812, and the break could cause a further loss to RM2,782, the 61.8% Fibonacci retracement of the downtrend from RM2,860 to the Oct. 3 low of RM2,656.

Resistance is at RM2,832, a break above which could lead to a gain to RM2,860.

(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.)