SINGAPORE: Palm oil Prices may fall to 4,109 ringgit per tonne, as it faces a strong resistance at 4,289 ringgit.
The resistance is identified as the 161.8% projection level of an upward wave c from 3,817 ringgit.
Most likely, this wave will end around this level, to be followed by a decent correction. The expected drop would make invalid a break above a lower resistance at 4,209 ringgit.
The contract may pull back towards a falling trendline.The pullback has been absent ever since palm oil broke the line.
A break above 4,289 ringgit may not lead to an impressive gain.Most likely, the gain will be limited to 4,360 ringgit.
On the daily chart, an inverted head-and-shoulders may have completed.The pattern suggests a medium-term target of 6,000 ringgit.
So far, the rise has been slow paced.It is unlikely to extend above a resistance at 4,331 ringgit over the next few days.
This barrier is near the peak of a wave B, which also established a similar resistance. A retracement to 4,070 ringgit will be good for the next round of rally.
