The Edge Markets (23/04/2019) - SINGAPORE (April 23): Palm oil is biased to break a support at RM2,155 per tonne and fall towards the next support at RM2,110, following its failure to break a resistance at RM2,227.

The support and the resistance are identified as the 38.2% and the 61.8% retracements on the downtrend from RM2,344 to RM2,038.

The contract is sandwiched between two trendlines which are contracting to a point. A sharp move is due. Wave pattern suggests an upside bias, as palm oil seems to be riding on a wave C from RM2,038, which is capable of travelling to RM2,344. However, the failure of the contract to break the upper trendline sends a conflicting signal.

On the daily chart, signals are neutral as palm oil is stuck within a narrow range of RM2,144-2,246, formed by the 100% and the 86.4% projection levels of a downtrend from RM2,896. The big black candlestick on Monday indicates a downside bias.

(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.)

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