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Palm oil may test a resistance at 2,963 ringgit per tonne, a break above which could lead to a gain into 2,994-3,023 ringgit.
The resistance is identified as the 14.6% projection level of a downward wave C from 3,023 ringgit. This wave looks too brief to complete. It may consist of three smaller waves.
The current wave b is unfolding towards 2,963 ringgit or 2,994 ringgit, to be then reversed by a downward wave c. A fall below 2,905 ringgit may signal the progress of the wave c.
On the daily chart, a retracement analysis on the uptrend from 2,522 ringgit to 3,104 ringgit reveals a target of 3,022 ringigt, the 7% level, as the contract has broken the resistance at 2,934 ringgit.
The break may prove to be false, if the contract opens lower on Friday and remains below 2,934 ringgit.
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.)
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