SINGAPORE (April 25): Palm oil remains neutral in a range of RM2,140-2,191 per tonne, and an escape could suggest a direction.
The range is formed by the April 15 low and the 50% retracements on the downtrend from RM2,344 to RM2,038.
A break below RM2,140 could cause a loss to RM2,110, while a break above RM2,191 could lead to a gain to RM2,227. The surge in the last trading hour on Wednesday signals an upside bias.
The pattern from the April 5 high of RM2,235 looks like a bullish wedge, which will be confirmed when palm oil breaks above RM2,227.
On the daily chart, palm oil looks neutral in a bigger range of RM2,144-2,246, formed by the 100% and the 86.4% projection levels of a downtrend from RM2,896. The contract may consolidate further in the range for one or two days.
(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.)