SINGAPORE (Feb 18): Palm oil is biased to break a resistance at RM2,285 per tonne and rise towards the next resistance at RM2,316.
These resistances are identified as the 14.6% and the 7% retracements of the uptrend from RM1,940 to RM2,344.
The contract found a strong support at RM2,249. A temporary bottom has formed around this level. It is not very clear if the uptrend from RM1,940 has resumed. The only clear part is the bounce triggered by the support may extend a bit.
A projection analysis on the daily chart reveals a support at RM2,246, the 86.4% level of a downward wave (C). This support works together with the support at RM2,249 to hold the fall. Chances are, palm oil may bounce to RM2,321.
(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.)