SINGAPORE: Palm oil may drop to 2,232 ringgit per tonne, as it failed again to break resistance at 2,373 ringgit.
Resistance is provided by the 14.6 percent Fibonacci retracement on the uptrend from the Aug. 25 low of 1,863 ringgit to the Sept. 29 high 2,460 ringgit. For three times, palm oil failed to overcome this barrier.
The repeated failures suggest the completion of a bounce from the Oct. 9 low of 2,216 ringgit, which has been driven by a wave b, the second wave of a three-wave cycle from 2,460 ringgit.
This wave may be totally reversed by a downward wave c, which could travel to 2,162 ringgit, the 50 percent retracement. A more realistic target could be 2,232 ringgit, the 38.2 percent level.