SINGAPORE (Feb 8): Palm oil is expected to rise to RM3,128 per tonne, as it has broken a resistance at RM3,089.
The resistance was identified at the 100% Fibonacci projection level of an upward wave C from the Oct 6, 2016 low of RM2,538. The next resistance will be at RM3,128, a break above which could lead to a further gain to RM3,169.
So far, the contract has been staying above a trendline from the July 12 low of RM2,186. The trend will be intact, so long as the trendline holds.
However, it could be too early to conclude that the correction from the Dec 19, 2016 high of RM3,202 has completed. It will be confirmed when palm oil goes above RM3,169.
A break below RM3,089, now a support, could cause a loss to RM3,014.
(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.)