SINGAPORE: Palm oil may drop into a range of 2,132-2,149 ringgit per tonne, as a correction from the Oct. 1 high of 2,223 ringgit could have extended.
The extension was indicated by the failure of palm oil to break a resistance at 2,195 ringgit, the 76.4 percent Fibonacci retracement on the fall from 2,223 ringgit to the Oct. 16 low of 2,104 ringgit.
Wave pattern suggests a three-wave structure for the correction, with the surge from 2,104 ringgit driven by the second wave, the wave b, and the current fall from the Oct. 24 high of 2,194 ringgit by the third wave labelled c.
The wave c may be strong enough to travel to 2,104 ringgit. A more realistic target could be either 2,149 ringgit, the 38.2 percent level, or 2,132 ringgit, the 23.6 percent level.
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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