SINGAPORE (April 18): Palm oil may stabilize around a support at RM2,191 per tonne and retest a resistance at RM2,227.
The support and the resistance are identified as the 50% and the 61.8% retracements of the downtrend from RM2,344 to RM2,038. The current correction is expected to be shallower than the preceding one from the April 9 high of RM2,232.
It is hard to pinpoint a level around which the current correction ends. The support at RM2,191 appears to hold the fall. A break below it, however, could cause a loss to RM2,155.
On the daily chart, the bounce from April 16 low of RM2,139 was due to a support at RM2,144, the 100% projection level of a downtrend from RM2,896. Based on this projection analysis, palm oil may rise to 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.)