SINGAPORE (Nov 3): The palm oil January contract may retest a support at 2,808 ringgit per tonne, with a good chance of breaking below this level and falling more towards the next support at 2,779 ringgit.

The first support is established at the 23.6 percent Fibonacci retracement of the uptrend from 2,656 ringgit to 2,855 ringgit. The short-lived gain from the Nov. 1 low of 2,802 ringgit simply indicates an extension of the correction from 2,855 ringgit.

Three small waves make up the correction. The third wave labelled c is driving the price towards 2,779 ringgit. Palm oil failed to go above an upper trendline. It is testing the lower trendline which may not hold.

Resistance is at 2,841 ringgit, a break above which could confirm the continuation of the uptrend towards 2,880 ringgit. - Reuters