Oct. 28 (Bloomberg) -- Palm oil may climb to the highest level in more than a year as prices break out of an inverted head-and-shoulders pattern, according to technical analysis by Maybank Investment Bank Bhd.
Futures traded in Kuala Lumpur may touch 2,615 ringgit ($834) a metric ton after they break resistance at 2,505 ringgit in about two to four weeks, said Lee Cheng Hooi, regional chartist at the bank, which is a subsidiary of Malaysia’s largest lender, Malayan Banking Bhd. The most-active contract last traded at 2,615 ringgit in October 2012.
The contract for delivery in January fell as much as 0.7 percent to 2,426 ringgit a ton on the Bursa Malaysia Derivatives before trading at 2,438 ringgit by 12:29 p.m. Kuala Lumpur time.
“The chart signals are pointing to a recovery in the daily and weekly time frames,” Lee said by phone today. “People are looking to buy this pattern.”
An inverted head-and-shoulders pattern comprises three consecutive bottoms on a chart, with the middle being the deepest. Resistance refers to levels where sell orders may be clustered, while support is where there may be orders to buy.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
--Editors: Ovais Subhani, Jake Lloyd-Smith