SINGAPORE (Feb 26): Palm oil may test a support at RM2,190 per tonne, a break below which could cause a loss into the range of RM2,154-2,177.
The support is identified as the 38.2% retracement on the uptrend from RM1,940 to RM2,344. Given that the former support at RM2,249, the 23.6% level, triggered a decent bounce, the current support could cause another one.
However, the contract is riding on a downward wave c from RM2,311. This wave has travelled below its 100% projection level at RM2,214. Chances are it may extend into the range of RM2,154-2,177.
On the daily chart, the contract broke a support at RM2,246, the 86.4% projection level of a downward wave (C). The break opened the way towards RM2,144.
A break above RM2,214 may lead to a gain limited to RM2,227-2,237.
(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.)