Technicals Palm oil to climb into 2,883-3,058 ringgit in 3 months

by **Cals** Fri 27 Dec 2013, 16:36

Technicals Palm oil to climb into 2,883-3,058 ringgit in 3 months

Business & Markets 2013

Written by Reuters

Friday, 27 December 2013 12:23

SINGAPORE (Dec 27): Malaysian palm oil is expected to rebound into a range of 2,883-3,058 ringgit per tonne over the next three months, as indicated by a Fibonacci retracement analysis and an inverted head-and-shoulders.
The rebound followed the completion of a downward wave C and may match the previous wave B in strength.
The wave B has reversed almost 76.4 percent of the preceding wave A that fell from the Feb. 10, 2011 high of 3,967 ringgit and bottomed at the Oct. 6, 2011 low of 2,754 ringgit.
A Fibonacci retracement analysis on the fall from the April 10, 2012 high of 3,628 ringgit to the July 26, 2013 low of 2,137 ringgit reveals a target range of 2,883-3,058 ringgit, respectively the 61.8 percent and the 50 percent retracements.
Based on the inverted head-and-shoulders that formed from May 6 to Oct. 29, palm oil should at least climb to 2,883 ringgit. However, there will not be any guarantee on an extension of the uptrend.
The upper channel line of a small rising channel also suggests the current uptrend may peak around 2,883 ringgit. For a chart: (http://link.reuters.com/dut65v)
Strategically, the high of the range at 3,058 ringgit will only be confirmed as a target when palm oil breaks above 2,883 ringgit,
Support is at 2,489 ringgit, a 23.6 percent Fibonacci retracement, a break below which may trigger a further drop to the Sept. 26, 2013 low of 2,265 ringgit. - Reuters