After rallying more than 53% within a 1-month period, Olam looks to be heading into a resistance zone capped by the upper Bollinger band, the top channel line of the 5.5-month channel and the support-turned resistance level of $1.70 established by the two major troughs in 2008.
The price action has also formed a Doji candlestick, signaling a potential reversal (still needs confirmation). The RSI indicator is now showing a negative divergence with the price action, further supporting our view that a near-term reversal is in the works.
As such, we see a possible pullback to the immediate support around $1.52 (recent peaks and 200-day MA), with the secondary support at around $1.23 (100-day MA and lower channel line).
Any upside from the current $1.70 level will likely meet resistance at the next support-turned resistance level of around $2.10.
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