SINGAPORE (Oct 26): Palm oil may bounce towards a resistance at RM2,199 per tonne, as it has found a support at RM2,161.

The support is provided by the 14.6% projection level of an upward wave C from the Sept 20 low of RM2,137. Even though this wave has completed, the various projection levels still work effectively.

Making the support at RM2,161 stronger is another similar one established by a rising trendline. Together, these two supports could at least hold the fall for a while. A break below RM2,161 could cause a loss to RM2,137.

Eventually, the contract could fall below RM2,137, as a projection analysis on the daily chart shows that it is going to retest a support at RM2,144, the 100% projection level of a bigger wave (C).

This wave has been unfolding within a falling channel, which remains intact and suggests a target around RM1,967.

(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.)

Source : The Edge Markets