MARKET DEVELOPMENT
Palm Oil To Consolidate, Rise
Palm Oil To Consolidate, Rise
28/04/2014 (Hindu Business Line) - Malaysian palm oil futures on the Bursa Malaysia Derivatives ruled higher on Monday, thanks to firm overseas soya oil futures while positive export data late last week fuelled optimism of a recovery in demand ahead of the festival season.
Cargo surveyors on Friday reported that exports of Malaysian palm oil products during April 1-25 rose 3.4 per cent from the same period a month ago.
CPO active month July futures are moving on the expected lines.
As mentioned in the previous update, prices could bottom out near Malaysian ringgit 2,565 levels, from where a possible intermediate bottom can be seen.
As anticipated, a decisive break above MYR2,672 is now hinting at strength again which could potentially push prices higher towards MYR 2,730-35 levels being a strong resistance level in the coming sessions.
Supports are seen at MYR 2,645-50 levels followed by MYR 2,620.
Favoured view: Expect prices to edge higher either after testing the above mentioned supports or directly move above MYR 2,695.
Only a direct fall below MYR 2,605/tonne could dash our bullish hopes further dragging prices sharply lower towards MYR 2,400 levels, which we do not favour.
As mentioned earlier, prices met an intermediate wave target at MYR 2,135 and corrective decline to MYR 2,345-50 levels, followed by a sharp third wave move to MYR 2,575-2,600 materialised.
Price structures suggest a possible third wave move ending at MYR 2,690 and a corrective, fourth wave with targets at MYR 2,450 or even lower.
The fifth wave possibly ended at MYR 2,898 and a corrective A-B-C in progress with an equality target at MYR 2,615-20/tonne levels and an extension even to MYR 2,545-50.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold.
The averages in MACD are below the zero line of the indicator hinting at a bearish reversal.
Only a crossover again above the zero line could at resumption in the bullish trend.
Therefore, look for palm oil futures to consolidate and climb towards resistances in the coming sessions.
Supports are at MYR 2,645, 2,620 and 2,595. Resistances are at MYR 2,695, 2,725 and 2,772.
(The author is the Director of Commtrendz Research and also in the advisory panel of Commodity exchanges and corporate houses. The views expressed in this column are his own. 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.)
Cargo surveyors on Friday reported that exports of Malaysian palm oil products during April 1-25 rose 3.4 per cent from the same period a month ago.
CPO active month July futures are moving on the expected lines.
As mentioned in the previous update, prices could bottom out near Malaysian ringgit 2,565 levels, from where a possible intermediate bottom can be seen.
As anticipated, a decisive break above MYR2,672 is now hinting at strength again which could potentially push prices higher towards MYR 2,730-35 levels being a strong resistance level in the coming sessions.
Supports are seen at MYR 2,645-50 levels followed by MYR 2,620.
Favoured view: Expect prices to edge higher either after testing the above mentioned supports or directly move above MYR 2,695.
Only a direct fall below MYR 2,605/tonne could dash our bullish hopes further dragging prices sharply lower towards MYR 2,400 levels, which we do not favour.
As mentioned earlier, prices met an intermediate wave target at MYR 2,135 and corrective decline to MYR 2,345-50 levels, followed by a sharp third wave move to MYR 2,575-2,600 materialised.
Price structures suggest a possible third wave move ending at MYR 2,690 and a corrective, fourth wave with targets at MYR 2,450 or even lower.
The fifth wave possibly ended at MYR 2,898 and a corrective A-B-C in progress with an equality target at MYR 2,615-20/tonne levels and an extension even to MYR 2,545-50.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold.
The averages in MACD are below the zero line of the indicator hinting at a bearish reversal.
Only a crossover again above the zero line could at resumption in the bullish trend.
Therefore, look for palm oil futures to consolidate and climb towards resistances in the coming sessions.
Supports are at MYR 2,645, 2,620 and 2,595. Resistances are at MYR 2,695, 2,725 and 2,772.
(The author is the Director of Commtrendz Research and also in the advisory panel of Commodity exchanges and corporate houses. The views expressed in this column are his own. 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.)