The Edge Markets (11/12/2017) - SINGAPORE (Dec 11): The palm oil third-month contract may fall to RM2,462 per tonne, a break below which could cause a loss to RM2,426.

The contract has broken a support at RM2,491, the 150% projection level of a downward wave C. The next support will be at RM2,462. A small head-and-shoulders suggests a similar target around RM2,462 as well.

Generally, the 161.8% projection level works as a strong barrier to a wave C. The bullish divergence on the hourly RSI indicates an exhaustion of this wave. At least palm oil may stabilize around RM2,462 or start a bounce.

Resistance is at RM2,519, a break above which could lead to a gain to RM2,555.

(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.)