MARKET DEVELOPMENT
Palm Oil To Test Resistance, Slide
Palm Oil To Test Resistance, Slide
29/06/2013 (Hindu Business Line) - Malaysian palm oil futures on the BMD ended lower on Friday tracking weak global commodity markets, while markets braced for a key US agricultural report that is expected to show higher planting of competing soyabean.
Losses were capped by strong exports buoyed by demand ahead of a month-long Ramzan in July. Exports in June 1-25 rose between 6 and 10 per cent compared to the same period in May.
Markets will be looking forward to data on total palm oil exports in June, due to be released on Monday, to gauge overall demand.
In other markets, Brent crude oil futures rose to around $103 a barrel after falling to multi-month lows, boosted by comments from Federal Reserve governors that the U.S. central bank is in no rush to curtail stimulus programme.
CPO active month futures moved against our expectations.
As mentioned in the earlier update, a daily close below MYR 2,355-60 a tonne could turn the picture weak again. Another crucial support lies at 2,330-35now. CPO futures have been fluctuating in a broad zone with the prevailing bias changing from bearish to bullish. However, the trend still remains bearish and weakness persists on the bigger picture. In the coming week, while 2,330-35 holds, a pullback to 2,395-2,400 looks likely initially.
However, prices could find it difficult to sustain and head lower again. Presently, technical pictures do not suggest any major trend either ways.
Once below MYR 2,300, prices could once again start declining towards MYR 2,200or even lower in the coming months. Any retracement could get capped in the MYR 2,385-2,420 levels now.
The wave counts still remains mixed and prefer for the time being to go with possibility of an end of wave “C” at MYR 2,220 a tonne now. A decline below 2,350 has dashed our bullish hopes. Ideally, prices could come down towards 2,095 or even lower in the bigger picture.
With the way prices have been behaving, the preferred wave counts now could be an extended wave “A-B-C-D-E” and eventually a break below MYR 2,200 opening the way for lower levels.
RSI is in the neutral zone indicating that it is neither overbought nor oversold.
The averages in MACD are still above the zero line of the indicator hinting at a bullish to be intact. Only a crossover below the zero line again could indicate a bearish trend.
Therefore, look for palm oil futures to test the resistance levels and then decline.
Supports are at MYR 2,335, 2,300 and 2,250. Resistances are at MYR 2,375, 2,405 and 2,445.
(The author is the Director of Commtrendz Research and also in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar.t@gmail.com.)
Losses were capped by strong exports buoyed by demand ahead of a month-long Ramzan in July. Exports in June 1-25 rose between 6 and 10 per cent compared to the same period in May.
Markets will be looking forward to data on total palm oil exports in June, due to be released on Monday, to gauge overall demand.
In other markets, Brent crude oil futures rose to around $103 a barrel after falling to multi-month lows, boosted by comments from Federal Reserve governors that the U.S. central bank is in no rush to curtail stimulus programme.
CPO active month futures moved against our expectations.
As mentioned in the earlier update, a daily close below MYR 2,355-60 a tonne could turn the picture weak again. Another crucial support lies at 2,330-35now. CPO futures have been fluctuating in a broad zone with the prevailing bias changing from bearish to bullish. However, the trend still remains bearish and weakness persists on the bigger picture. In the coming week, while 2,330-35 holds, a pullback to 2,395-2,400 looks likely initially.
However, prices could find it difficult to sustain and head lower again. Presently, technical pictures do not suggest any major trend either ways.
Once below MYR 2,300, prices could once again start declining towards MYR 2,200or even lower in the coming months. Any retracement could get capped in the MYR 2,385-2,420 levels now.
The wave counts still remains mixed and prefer for the time being to go with possibility of an end of wave “C” at MYR 2,220 a tonne now. A decline below 2,350 has dashed our bullish hopes. Ideally, prices could come down towards 2,095 or even lower in the bigger picture.
With the way prices have been behaving, the preferred wave counts now could be an extended wave “A-B-C-D-E” and eventually a break below MYR 2,200 opening the way for lower levels.
RSI is in the neutral zone indicating that it is neither overbought nor oversold.
The averages in MACD are still above the zero line of the indicator hinting at a bullish to be intact. Only a crossover below the zero line again could indicate a bearish trend.
Therefore, look for palm oil futures to test the resistance levels and then decline.
Supports are at MYR 2,335, 2,300 and 2,250. Resistances are at MYR 2,375, 2,405 and 2,445.
(The author is the Director of Commtrendz Research and also in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar.t@gmail.com.)