27.06.2018 (The Edge Markets MY) - SINGAPORE (June 27): Palm oil may be rangebound between RM2,150 and RM2,398 per tonne in the third quarter, as suggested by a triangle, the wave pattern and a projection analysis.

The contract has been consolidating within the huge triangle since early March 2008. Five waves are presumed to make up this pattern. The final wave labelled E is unfolding towards RM2,150, its 50% projection level.

The projection analysis is based on the downtrend from the February 2011 high of RM3,967. Given that the 38.2% level at RM2,398 caused a very decent bounce in late June 2017, the support at RM2,150 may trigger a similar rebound.

Making a bounce around RM2,150 more likely is another support established by the lower trendline of the triangle. A falling channel indicates palm oil may bounce towards RM2,398, once it manages to stabilize around RM2,150.

The downtrend from RM3,202 could be divided into three waves. The third wave labelled c is unfolding. A projection analysis on the daily chart reveals that this wave is ending, as it is very close to its ultimate target at RM2,119, the 100% level.

A bullish reversal could occur anywhere above RM2,119.

Resistance is at the May 4 low of RM2,324, a break above which could lead to a gain to RM2,416.