MARKET DEVELOPMENT
Palm Oil to Test Supports, Rise
Palm Oil to Test Supports, Rise
05/08/2014 (Hindu Business Line) - Malaysian palm oil futures on the Bursa Malaysia Derivatives Exchange ended lower on Monday on rising global oilseed supply and falling exports. Persistent weakness in the soya complex also continues to weigh on palm crude oil futures. Prospects of bigger supplies of soyabeans, due to a near-record production in the US, have dragged soya oil prices further making the competitiveness to palm more attractive. Cargo surveyors SGS on Monday reported that exports of Malaysian palm oil products in July fell 2.8 per cent to 1.35 million tonnes compared with the previous month.
Palm oil active month October futures are moving lower as expected. As mentioned in the previous update, prices could possibly be targeting MYR 2,250/tonne on the downside. Also, as discussed several targets are seen being tested in the coming sessions on the break below 2,275 levels. Support will now be seen near 2,245-50/tonne levels. Below here the market could be inclined to test further lows near 2,185 levels too. Though the undercurrent is weak, prices are displaying some bullish tendencies still. Prices are holding well above 2,245-50 levels and this gives us a feeling that an up move or pullback looks likely in the coming sessions. While 2,245 holds, prices are expected to test resistances at 2,295-2,310 initially followed by 2,355-65 levels. Only a close below 2,245 could see prices declining to 2,185-2,200 levels.
As mentioned earlier, prices met an intermediate wave target at MYR 2,135/tonne and corrective decline to 2,345-50 levels, followed by a sharp third wave move to 2,575-2,600 materialised. Price structures suggest a possible third wave move ending at 2,690 and a corrective, fourth wave with targets at 2,450 now. The fifth wave possibly ended at 2,898 and a corrective A-B-C in progress with an equality target now stretching to 2,185 levels now.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold. However, the averages in MACD are still below the zero line of the indicator hinting at a bearishness to be intact. Only a crossover again above the zero line could at resumption in the bullish trend.
Therefore, look for palm oil futures to test supports and then rise again.
Supports are at MYR 2,245, 2,210 and 2,185. Resistances are at MYR 2,300, 2,355 and 2,395.
Palm oil active month October futures are moving lower as expected. As mentioned in the previous update, prices could possibly be targeting MYR 2,250/tonne on the downside. Also, as discussed several targets are seen being tested in the coming sessions on the break below 2,275 levels. Support will now be seen near 2,245-50/tonne levels. Below here the market could be inclined to test further lows near 2,185 levels too. Though the undercurrent is weak, prices are displaying some bullish tendencies still. Prices are holding well above 2,245-50 levels and this gives us a feeling that an up move or pullback looks likely in the coming sessions. While 2,245 holds, prices are expected to test resistances at 2,295-2,310 initially followed by 2,355-65 levels. Only a close below 2,245 could see prices declining to 2,185-2,200 levels.
As mentioned earlier, prices met an intermediate wave target at MYR 2,135/tonne and corrective decline to 2,345-50 levels, followed by a sharp third wave move to 2,575-2,600 materialised. Price structures suggest a possible third wave move ending at 2,690 and a corrective, fourth wave with targets at 2,450 now. The fifth wave possibly ended at 2,898 and a corrective A-B-C in progress with an equality target now stretching to 2,185 levels now.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold. However, the averages in MACD are still below the zero line of the indicator hinting at a bearishness to be intact. Only a crossover again above the zero line could at resumption in the bullish trend.
Therefore, look for palm oil futures to test supports and then rise again.
Supports are at MYR 2,245, 2,210 and 2,185. Resistances are at MYR 2,300, 2,355 and 2,395.