Technicals Palm oil to rebound to 2,390 ringgit in 3 months

by **Cals** Fri 26 Sep 2014, 18:25

Technicals Palm oil to rebound to 2,390 ringgit in 3 months

Business & Markets 2014

Written by Reuters

Friday, 26 September 2014 14:54

SINGAPORE (Sept 26): Palm oil may rebound to 2,390 ringgit per tonne over the next three months, as it has failed to break support at 2,017 ringgit.

Support is provided by the 61.8 percent Fibonacci projection level of a downward wave C that developed from the Feb 10, 2011 high of 3,967 ringgit.

This is the third wave of a big three-wave cycle that developed from the March 4, 2008 high of 4,486 ringgit. It is not very clear if the wave C has completed, as it may consist of five waves, with the last wave labelled e having completed at the Sept. 2 low of 1,914 ringgit, or seven waves, with its final wave labelled c yet to develop.

It does not matter whether the wave C has adopted a five-wave mode or seven-wave mode, as a decent rebound has indeed been triggered, extending towards the 50 percent projection level at 2,390 ringgit.

Both the wave modes indicate a chance of palm oil to break resistance and gain more towards the 38.2 percent retracement at 2,762 ringgit.

These two Fibonacci projection levels are approximately identical to other two levels that are revealed by a Fibonacci retracement analysis on the downtrend from 3,967 ringgit to 1,914 ringgit, namely 2,399 ringgit and 2,698 ringgit, respectively the 23.6 percent and the 38.2 percent retracements.

Support is at 2,060 ringgit, the 14.6 percent Fibonacci retracement on the fall from the March 11 high of 2,916 ringgit to 1,914 ringgit, a break below which could signal the completion of the rebound and support at 1,914 ringgit will be retested. — by Wang Tao, Reuters.

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.