SINGAPORE: Palm oil may retest a resistance at 6,354 ringgit per tonne, as the bounce from the May 20 low of 5,925 ringgit looks incomplete.
The bounce consists of three waves. So far, only two have unfolded.
The wave b may be ending around a support at 6,099 ringgit, to be reversed by the wave c.
A study on the relation between the preceding wave (c) and the wave (a) reveals the former is roughly 61.8% of the latter in length.
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This much shorter wave (c) represents a prevailing bullish sentiment, which is responsible for the occurrence of the strong wave a.
An extension of the wave b may be limited to 5,984 ringgit.
On the daily chart, the inverted hammer forming on May 20 confirmed a reversal of the downtrend from 7,229 ringgit.
A trendline rising from 4,245 ringgit remains intact.
It suggests a steady uptrend which may extend towards 7,229 ringgit.