SINGAPORE: Palm oil still targets 3,707 ringgit per tonne, as it has stabilised around a support of 3,563 ringgit. The support is identified as the 50% retracement of a five-wave cycle from 3,288 ringgit.

It is strengthened by a similar one of 3,552 rigggit.

The contract has briefly pierced above a resistance zone of 3,627-3,634 ringgit. Chances are it may extend gains to 3,707 ringgit.

Only a break below 3,563 ringgit could confirm the continuation of the downtrend from 3,837 ringgit, towards 3,418-3,498 ringgit range.

On the daily chart, the contract found a support at 3,556 ringgit.

It is expected to test the resistance at 3,722 ringgit, which is slightly higher than 3,707 ringgit (hourly chart).

Palm oil may bounce to 3,707 ringgit

The pattern from the April 17 low of 3,567 ringgit looks like an inverted head-and-shoulders, which will be confirmed when the contract breaks the key resistance at 3,857 ringgit.