Technicals Palm oil may rise into RM2,870-RM2,960 range in 3 mths

by **Cals** Tue 05 Apr 2016, 00:39

Technicals

[size=28]Palm oil may rise into RM2,870-RM2,960 range in 3 mths

By Reuters / Reuters | April 4, 2016 : 2:50 PM MYT

SINGAPORE (April 4): Palm oil may rise into a range of RM2,870–RM2,960 per tonne over the next three months, as indicated by its wave pattern and a Fibonacci ratio analysis.

The range is formed by the 38.2% Fibonacci projection level of an upward C from the Aug 25, 2015 low of RM1,863, and the 38.2% Fibonacci retracement on the uptrend from the Oct 28, 2008 low of RM1,331 to the Feb 10, 2011 high of RM3,967.

The wave is the third leg of a three-leg cycle from RM1,331. It has travelled far above its 23.6% projection level at RM2,485 and could be unfolding towards RM2,870.

In the meantime, the contract has climbed above RM2,649, the 50% retracement. The next retracement is at RM2,960.

A huge triangle has been developing from the March 2008 high of RM4,486, the upper trendline of which suggests the target range of RM2,870–RM2,960 as well.

This trendline will also provide a strong resistance, working together with the one at RM2,960, to stop the rally and probably cause a correction towards RM2,649.

The rally from the Aug 25, 2015 low of RM1,863 has adopted a three-wave mode.

The third wave labelled c is capable of travelling to RM2,857, its 100% Fibonacci projection level, which is close to RM2,870.

Support is at RM2,716, the 76.4% level, a break below which may cause a loss limited to RM2,629, the 61.8% level.

(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.)

[/size]