SINGAPORE: Palm oil looks neutral in a narrow range of 4,085 ringgit to 4,269 ringgit per tonne, and an escape could suggest a direction.
The contract is still confined within a rising channel. Following its failure to rise above this channel, it is supposed to fall towards the lower channel line.
However, the bearish target of 3,857 ringgit will not be confirmed until the contract breaks 4,085 ringgit.
A break above 4,269 ringgit may lead to a gain to 4,452 ringgit.
On the daily chart, wave pattern indicates a downside bias, as the bounce from the July 14 low of 3,489 ringgit seems to have been driven by a wave (4), the fourth wave of a five-wave cycle from 7,229 ringgit.
Palm oil to hover below 4,452 ringgit
This wave is expected to be reversed by a downward wave (5), which could have started.
A break below 4,070 ringgit would confirm the progress of this wave towards a range of 3,522 ringgit to 3,891 ringgit.