Palm oil targets RM2,094

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SINGAPORE (March 11): Palm oil is expected to break a support at RM2,117 per tonne and fall to the next support at RM2,094, as suggested by a Fibonacci ratio analysis and a falling channel.

The downtrend from the Feb 7 high of RM2,344 remains steady within a falling channel, which indicated a target range of RM2,305-2,094, formed by the 76.4% and the 61.8% retracements of the uptrend from RM1,940 to RM2,344.

Five waves make up the trend, with the fifth wave labelled e unfolding towards the target range. Resistance is at RM2,154, a break above which could lead to a gain to RM2,177.

On the daily chart, palm oil broke a support at RM2,144, the 100% projection level of a wave (C). The next support will be at RM2,091, a break below which could cause a loss to RM2,034.

(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.)