SINGAPORE: Palm oil may test a support of 4,225 ringgit per tonne, a break below which could trigger a drop into 4,153-4,197 ringgit range. The drop on Monday does not look like the second pullback towards the Jan. 3 high of 4,276 ringgit.

Instead, it could be a part of a deep correction towards the bottom of the wave iv around 4,153 ringgit.

The duration and the complexity of the correction from the March 2 high of 4,425 ringgit suggests the completion of a five-wave cycle from the Feb. 10 low of 3,849 ringgit.

Immediate resistance is at 4,305 ringgit, a break above which could lead to a gain into 4,341-4,385 ringgit range. On the daily chart, the contract is seeking a support around 4,209 ringgit, as it failed to break the resistance at 4,360 ringgit.

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The Feb. 2 low of 3,728 ringgit may work as the starting point of a five-wave cycle.

This wave count has a much more bearish indication that the contract may retrace deeply to 4,022 ringgit.