SINGAPORE: Palm oil may retest a support at 4,267 ringgit per tonne, a break below which could open the way towards 3,900-4,090 ringgit range.
The drop on Monday confirmed a continuation of the downtrend towards a support zone of 3,592-3,900 ringgit, as pointed by a falling trendline.
The support at 4,267 ringgit triggered a moderate bounce, which looks like a pullback towards the June 22 low of 4,493 ringgit.
A break above 4,588 ringgit may signal the completion of the wave 5 and the reversal of the downtrend. Signals on the daily chart are a bit conflicting with that of the hourly chart.
Palm oil may stabilize around 4,588 ringgit
A projection analysis reveals a support at 4,331 ringgit, the 161.8% level, which is supposed to stop the fall the trigger a bounce.
However, there is no candlestick confirming a possible reversal yet.
Such a pattern, if it forms, may appear on Tuesday.