SINGAPORE: Palm oil May contract may test a resistance at 3,662 ringgit per tonne, a break above which could lead to a gain into a range of 3,685-3,722 ringgit.

The contract has briefly pierced above the Jan. 7 high of 3,631 ringgit. The possibility of a flat pattern has been excluded.

This pattern suggests a return of the price to 3,110 ringgit. The current signal suggests a slim chance of a deep drop.

On the daily chart, the contract is riding on a wave C, which is likely to extend to 3,817 ringgit. Given that the resistance at 3,634 ringgit triggered a deep correction in January, a much shallower correction may occur around this level.

The exact move on Thursday remains unclear. The contract may open lower and retreat towards 3,521 ringgit or open high but close below 3,634 ringgit. A consolidation around 3,634 ringgit is highly anticipated.

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