SINGAPORE (Jan 31): Palm oil may slide into a range of RM2,256-2,274 per tonne, as its correction from the Jan 28 high of RM2,333 looks incomplete.
The correction was triggered by a resistance at RM2,322, the 276.4% projection level on an uptrend from RM1,979.
Three waves make up the correction. The second wave labeled b may have ended around RM2,322. The third wave labled c is about to start, to drive the price towards target zone.
A break above RM2,322 could lead to a gain to RM2,351. However, the break looks doubtful on the daily chart. Working together the resistance at RM2,322 is another one at RM2,321, the 76.4% projection level of a downward wave (C) from RM2,896.
It seems that the contract is falling towards a support at RM2,246. It may not retest the resistance so soon.
(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.)