SINGAPORE: Palm oil may test a support at 3,740 ringgit per tonne, a break below which could open the way towards a range of 3,683-3,718 ringgit.

The drop looks deep enough to indicate a continuation of the downtrend from 4,425 ringgit.

A retracement analysis on the bounce from the March 24 low of 3,500 ringgit reveals a brief piercing below the 38.2% level of 3,797 ringgit.

Chances are the contract may slide into 3,683-3,740 ringgit range.

A bounce from the current level may be limited to a resistance zone of 3,853-3,867 ringgit.

Palm oil hits one-week low on weaker rivals but logs weekly rise

On the daily chart, the contract has broken a support at 3,859 ringgit.

The break opened the way towards 3,708 ringgit. Classified as a pullback towards a rising trendline, the bounce from 3,500 ringgit may be totally reversed this week.

A break above 3,859 ringgit may complicate the picture, as the break could be followed by a further gain to 4,009 ringgit.