27/01/2008 (Sify.com) - Malaysian palm oil futures ended higher on Friday with strong gains in soya oil and the energy complex. Exports were lower, offsetting falling production. Moreover, Chinese buying in the coming weeks are expected to be lower due to Lunar New Year holidays and production to increase simultaneously.

Malaysian palm oil exports fell 27.1 per cent on month in the January 1-25 period to 816,471 tonnes, cargo surveyor SGS (Malaysia) Bhd. said in an estimate on Friday. Exports dur ing December 1-25 period were estimated at 1.12 million tonnes.

CPO active contract corrected lower as expected. As expected, support at 3065 levels held well. However, prices structures remains indecisive on direction. Bigger picture charts suggest that unless 3355-60 Malaysian ringgit (MYR) tonne caps the upside, we can expect a corrective fall to 2895 MYR/tonne levels. But, a direct rise above 3378 MYR/tonne will rekindle bullish expectations. Favoured view expects a correction lower towards recent low of 3041 MYR/tonne or even lower.

A new impulse began from 1427 MYR/tonne as per the recent wave counts. We could still be in the fifth wave impulse and not an end as mentioned in the previous update. We can expect a corrective A-B-C to begin now targeting 2895 levels or worst-case 2700 MYR/tonne. RSI is in the overbought zone indicating a correction to take place. The averages in MACD are above the zero line in the indicator indicating bullishness to be intact. Therefore, look for palm oil futures to test the resistance levels and then correct lower subsequently.