SINGAPORE: Palm oil may keep bouncing to 3,910 ringgit per tonne, a break above which could open the way towards 3,980 ringgit.

It is hard to classify the strong bounce on Tuesday, which could be a reaction to the continuous fall from 3,980 ringgit, or a continuation of the uptrend from 3,500 ringgit.

The depth of the fall from 3,980 ringgit suggests a resumption of the previous downtrend from 4,425 ringgit. Based on this observation, the current bounce may end in the range of 3,867-3,910 ringgit.

A break below 3,797 ringgit could be followed by a drop to 3,740 ringgit.

On the daily chart, a bullish engulfing formed between Monday and Tuesday, which suggests a further gain on Wednesday.

Palm oil snaps three days of losses

The gain will be regarded as the second pullback towards a trendline.

Only a break above 4,009 ringgit could confirm an extension of the uptrend from 3,500 ringgit.