23.09.2019 (Business Recorder) -

• The fifth wave labelled 5 may have just started, unfolding towards 1,634 ringgit, as pointed by a falling trendline.
• Based on a head-and-shoulders developing between March 2016, and March 2018, palm oil may drop to 1,634 ringgit as well.
  

SINGAPORE: Palm oil may retest a support at 1,933 ringgit per tonne in the fourth quarter, a break below which could cause a fall towards the next support at 1,634 ringgit.

These supports are identified as the 61.8pc and the 76.4pc projection levels respectively, of a downward wave C from the December 2016, high of 3,202 ringgit.

This wave extends a downtrend from the February 2011, high of 3,967 ringgit.

Five smaller waves make up the wave C. The fourth wave labelled 4 looks sideways.

It alternates in wave mode with the second wave labelled 2 which is sharp.

The surge from the July 2019, low of 1,916 ringgit proves to be the final part of the wave 4.

The fifth wave labelled 5 may have just started, unfolding towards 1,634 ringgit, as pointed by a falling trendline.

Based on a head-and-shoulders developing between March 2016, and March 2018, palm oil may drop to 1,634 ringgit as well.

Another projection analysis on the downtrend from 2,896 ringgit reveals a similar target at 1,639 ringgit, the 161.8pc level.

A break above 2,302 ringgit, however, could confirm a double-bottom forming around 1,933 ringgit, and a bullish target at 2,902 ringgit will be established accordingly.

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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.