SINGAPORE (March 21): Palm oil is expected to test a resistance at RM2,190 per tonne, a break above which could lead to a gain to RM2,227.
The resistance is identified as the 38.2% retracement of the uptrend from RM1,940 to RM2,344. The next resistance will be at RM2,190, a break above which could open the way towards RM2,227, the 61.8% retracement of the downtrend from RM2,344 to RM2,038.
Support is at RM2,142, a break below which may cause a loss to RM2,094. On the daily chart, the bullish momentum seems to be strong, following a break above a resistance at RM2,144, the 100% projection level of a downtrend from RM2,896.
This momentum may drive the price to RM2,246, which is pointed by a falling trendline. Following its first failure to break the trendline on Feb 7, palm oil could be making its second attempt to test this line.
(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.)