SINGAPORE, June 29 (Reuters) – TOCOM rubber may rise into a range of 223.10-236.70 yen per kg in three months, as suggested by its wave pattern and a Fibonacci retracement analysis.
The downtrend from the Jan. 31 high of 366.70 yen has completed, as it could be broken down into five small waves. The bounce from the June 7 low of 178.80 yen has been strong enough to confirm a reversal of the downtrend.
Further indication on a reversal of the downtrend comes from the bullish divergence on the daily MACD, which simply suggests the downtrend could hardly extend more.
Labelled 4, the fourth wave of the downtrend peaked at the May 24 high of 236.70 yen. Wave theory indicates that this high may be approached.
A Fibonacci retracement analysis on the downtrend marks a more realistic target at 223.10 yen, the 23.6 percent level. A high-low bottom forming around 178.80 yen points a target close to 236.70 yen.
It seems all the techniques present a bullish outlook in next quarter. Strategically, the target zone of 223.10-236.70 yen will be confirmed when rubber breaks above the immediate resistance at 206.20 yen.
A correction from the current level may be limited to 192 yen.
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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. ** (Reporting by Wang Tao; Editing by Sherry Jacob-Phillips)
