MARKET DEVELOPMENT
MCX Crude Palm Oil Tests Key Resistance
MCX Crude Palm Oil Tests Key Resistance
25/01/2017 (Hindu Business Line) - Crude Palm Oil prices has been surging consistently since November 2016.
The Crude Palm Oil (CPO) futures contract traded on the Multi Commodity Exchange (MCX) made a low of ₹504 per 10 kg in October and has gained 18 per cent since then to the current level of ₹596.
But this rally is now poised at a crucial resistance on the charts. There is a long-term resistance at around ₹600. Whether the contract breaks above this hurdle or not will decide the next leg of move.
An analysis on the CPO futures contract traded on the Bursa Malaysia Derivatives Exchange suggest that the MCX contract may extend the uptrend breaking above ₹600 in the coming weeks.
The MCX-CPO contract moves in tandem with the Malaysian contract.
Outlook: The Malaysian CPO contract broke above a key Fibonacci resistance at MYR 3,160 per tonne in December.
The contract, though is trading range bound is managing to sustain above MYR 3,160 level. This is a positive signal.
It is currently trading at around MYR 3,278. As long as the contract trades above MYR 3,160, there is a strong likelihood of it rising to MYR 3,420 or MYR 3,450.
Further break above MYR 3,450 can see the upmove extending to MYR 3,500.
The outlook for the contract will turn negative only if it declines below MYR 3,160. But such a break looks less probable at the moment.
The positive outlook on the Malaysian CPO contract may aid the MCX-CPO contract to breach above the key resistance at around ₹600 in the coming weeks. Such a break can take it to ₹620 or ₹630 thereafter.
But if the contract fails to breach above ₹600 and declines below the support at ₹580, then it can decline to ₹560 or ₹550 in the short-term.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
The Crude Palm Oil (CPO) futures contract traded on the Multi Commodity Exchange (MCX) made a low of ₹504 per 10 kg in October and has gained 18 per cent since then to the current level of ₹596.
But this rally is now poised at a crucial resistance on the charts. There is a long-term resistance at around ₹600. Whether the contract breaks above this hurdle or not will decide the next leg of move.
An analysis on the CPO futures contract traded on the Bursa Malaysia Derivatives Exchange suggest that the MCX contract may extend the uptrend breaking above ₹600 in the coming weeks.
The MCX-CPO contract moves in tandem with the Malaysian contract.
Outlook: The Malaysian CPO contract broke above a key Fibonacci resistance at MYR 3,160 per tonne in December.
The contract, though is trading range bound is managing to sustain above MYR 3,160 level. This is a positive signal.
It is currently trading at around MYR 3,278. As long as the contract trades above MYR 3,160, there is a strong likelihood of it rising to MYR 3,420 or MYR 3,450.
Further break above MYR 3,450 can see the upmove extending to MYR 3,500.
The outlook for the contract will turn negative only if it declines below MYR 3,160. But such a break looks less probable at the moment.
The positive outlook on the Malaysian CPO contract may aid the MCX-CPO contract to breach above the key resistance at around ₹600 in the coming weeks. Such a break can take it to ₹620 or ₹630 thereafter.
But if the contract fails to breach above ₹600 and declines below the support at ₹580, then it can decline to ₹560 or ₹550 in the short-term.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.