MARKET DEVELOPMENT
Palm Oil to Test Resistance, Slip
Palm Oil to Test Resistance, Slip
04/11/2014 (Hindu Business Line) - Malaysian palm oil futures on the Bursa Malaysia Derivatives ended higher on Monday as the currency weakened pushing prices to four-month highs.
CPO futures posted its biggest weekly rise since November 2013. The rise was helped by projections of smaller supplies and easing inventories amid an anticipated boost in food and fuel demand.
Malaysian exports of palm oil products fell 2 per cent to 1.46-1.47 million tonnes shipped in October compared to a month ago, data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed on Friday.
CPO active month January futures moved as per expectations. As mentioned in the previous update, we expect prices could now see a consolidation in the MYR 2,120-25 and MYR 2,195-2,200 a tonne range and then breakout higher towards 2,245-50. The present upside has potential to go up towards MYR 2,400-10 a tonne levels on the upside. Any corrective dips are expected to find support in the 2,245-50 zone now. Minor resistance lies at 2,362-65 levels. Favoured view expectsprices to test 2,405-15 levels on the upside while supports are at 2,305 followed by 2,245-50 levels hold.
Despite the present up move, the big picture charts are yet to show a convincing reversal in trend. Therefore, we remain bullish in the short-term and expect resistance levels to be tested while remaining cautious about medium-term bullishness.
As mentioned earlier, we are now more inclined to an impulsive move towards MYR 2,295-2,300/tonne levels or even higher to 2,410. This could either be a corrective move within a larger downtrend.
A rise above 2,600 could revive hopes of a new impulse, which can carry prices much higher towards 2,900. However, we still look at the present move to be a corrective one within a larger downtrend.
RSI is in the overbought zone now indicating a possible downward correction in the offing. The averages in MACD are above the zero line of the indicator hinting at a bullish reversal. Only a crossover again below the zero line could hint at resumption in the bearish trend.
Therefore, look for palm oil futures to test the resistance and then correct lower.
Supports are at MYR 2,305, 2,250 and 2,220. Resistances are at MYR 2,365, 2,410 and 2,475.
CPO futures posted its biggest weekly rise since November 2013. The rise was helped by projections of smaller supplies and easing inventories amid an anticipated boost in food and fuel demand.
Malaysian exports of palm oil products fell 2 per cent to 1.46-1.47 million tonnes shipped in October compared to a month ago, data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed on Friday.
CPO active month January futures moved as per expectations. As mentioned in the previous update, we expect prices could now see a consolidation in the MYR 2,120-25 and MYR 2,195-2,200 a tonne range and then breakout higher towards 2,245-50. The present upside has potential to go up towards MYR 2,400-10 a tonne levels on the upside. Any corrective dips are expected to find support in the 2,245-50 zone now. Minor resistance lies at 2,362-65 levels. Favoured view expectsprices to test 2,405-15 levels on the upside while supports are at 2,305 followed by 2,245-50 levels hold.
Despite the present up move, the big picture charts are yet to show a convincing reversal in trend. Therefore, we remain bullish in the short-term and expect resistance levels to be tested while remaining cautious about medium-term bullishness.
As mentioned earlier, we are now more inclined to an impulsive move towards MYR 2,295-2,300/tonne levels or even higher to 2,410. This could either be a corrective move within a larger downtrend.
A rise above 2,600 could revive hopes of a new impulse, which can carry prices much higher towards 2,900. However, we still look at the present move to be a corrective one within a larger downtrend.
RSI is in the overbought zone now indicating a possible downward correction in the offing. The averages in MACD are above the zero line of the indicator hinting at a bullish reversal. Only a crossover again below the zero line could hint at resumption in the bearish trend.
Therefore, look for palm oil futures to test the resistance and then correct lower.
Supports are at MYR 2,305, 2,250 and 2,220. Resistances are at MYR 2,365, 2,410 and 2,475.