21/06/2017 (The Times Of India) – SINGAPORE: Palm oil Sept. contract may test a support at 2,441 ringgit per tonne, a break below which could cause a further loss to the next support at 2,421 ringgit.

These supports are identified respectively as the 23.6 percent and the 14.6 percent Fibonacci retracements on the downtrend from the May 18 high of 2,605 ringgit to the June 8 low of 2,390 ringgit.

A gap forming between 2,451 ringgit and 2,466 ringgit on the hourly chart proves to be a common gap which indicates the rise from 2,390 ringgit is indeed a bounce.

The current drop from June 19 high of 2,515 ringgit seems to be due to a resistance at 2,523 ringgit. However, there could be a deeper reason. On the daily chart, a trendling falling from the Jan. 18 high of 2,966 ringgit established a resistance exactly at 2,515 ringgit that worked effectively in stopping the gains.

In the worst case, palm oil could fall below 2,390 ringgit, as indicated by a lower trendline. A break above 2,472 ringgit (refer to the first chart) could lead to a gain to 2,498 ringgit. – REUTERS