SINGAPORE: Palm oil may fall into a range of 4,769-4,822 ringgit per tonne, as it faces a resistance at 4,998 ringgit.
Simply based on the continuous chart, the drop appears to be due to the resistance. However, there is a deeper reason that the third month contract would switch on Tuesday.
The near 200 ringgit spread between January and February contracts would have a big impact on the chart formation. A big gap is expected to form at the market open on Tuesday.
Regardless of the technical or mechanical reason behind this drop, the downtrend from the Oct. 21 high of 5,220 ringgit would develop further within a falling channel.
On the daily chart, the contract is doomed to fail breaking a strong resistance at 5,024 ringgit, which is pointed by a falling trendline. The failure could be followed by a slide of the price toward 4,698 ringgit.
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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