20/7/2017 (The Edge Markets MY) - SINGAPORE (July 20): Palm oil October contract is expected to retest a support at 2,501 ringgit per tonne, a break below which could cause a loss to 2,481 ringgit.

The support is provided by the 50 percent Fibonacci retracement of the uptrend from the June 22 low of 2,417 ringgit to 2,585 ringgit. This barrier triggered a bounce which is indeed a pullback towards a rising channel. A duplicated channel suggests a bearish target at 2,440 ringgit.

The duration and the depth of the drop from 2,585 ringgit confirm a reversal of the uptrend from the June 8 low of 2,376 ringgit. The trend consists of three waves. The second wave labelled B ended at 2,417 ringgit, which may be approached, according to wave theory.

A rise above 2,530 ringgit may be limited 2,545 ringgit. – Reuters