SINGAPORE: Internationally Palm oil may retest a support of 4,114 ringgit per tonne, a break below which could open the way towards 4,001-4,071 ringgit range.
A five-wave cycle from 3,594 ringgit completed around a key resistance at 4,253 ringgit.
Unless the wave 5 extended unexpectedly, the correction triggered by the resistance may extend to 4,001 ringgit, as suggested by a rising channel.
Internationally correction of palm could roughly match the one from the Oct. 7 high of 3,846 ringgit.
A break above 4,253 ringgit may confirm the extension of the wave 5 towards 4,322-4,495 ringgit range.
Palm oil erases some earlier gains as rival oils ease
On the daily chart, a pullback towards an inverted head-and-shoulders has been due. It is strange that the pullback is yet to occur.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange fell 0.07% to 4,124 ringgit ($872.99) per tonne by midday break as a rally in rival oils eased.
“We’re following external markets rather closely at the moment, so when Dalian, CBOT and crude oil take a breather, we’ll follow to take profits,” a trader in Kuala Lumpur said. Dalian’s most active soyoil contract posted a 0.52% gain, while its palm oil contract rose 0.56%.
Earlier in the day, the contracts rose by as much as 1.05% and 2.07%, respectively. Soyoil prices on the Chicago Board of Trade were up 0.22%.
Either this pullback happens around 4,331 ringgit, or it has started, only that it may take some time to extend to 3,891 ringgit.
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