MARKET DEVELOPMENT
MCX Crude Palm Oil is on A Strong Footing
MCX Crude Palm Oil is on A Strong Footing
08/12/2016 (Hindu Business Line) - Crude Palm Oil (CPO) prices have been surging continuously over the last several weeks. Prices have skyrocketed over 10 per cent since the first week of November.
The Crude Palm Oil futures contract traded on the Multi Commodity Exchange (MCX) has shot up from ₹515.4 per 10 kg in the first week of November to ₹567 now.
The rise in the domestic CPO futures contract has been aided by the strong rally in the Malaysian CPO futures contract traded on the Bursa Malaysia Derivatives Exchange.
The MCX contract moves in tandem with the Malaysian CPO contract. The Malaysian CPO contract is on a strong footing from a medium-term perspective which leaves the outlook bullish for the MCX-CPO futures contract.
Outlook
The sharp 16 per cent rally in the Malaysian CPO contract since October has helped it to breach above a key trend-line resistance point at MYR 2,950 per tonne as well as the 61.8 per cent Fibonacci retracement resistance at MYR 3,160 per tonne.
The contract is currently trading close to MRY 3,200 per tonne.
Strong support for the contract is in the range between MYR 2,950 and MYR 2,975.
Dips to this support zone may find fresh buyers coming into the market.
As long as the contract trades above this support, a rally to MRY 3,500 looks likely from a medium-term perspective.
On the domestic front, the MCX-CPO futures contract has breached its key resistance at ₹543 per 10 kg.
The contract is currently poised near ₹567. An immediate rise to ₹580 is possible.
A further break above ₹580 will see the up move extending to ₹600 and thereafter ₹605.
Traders can buy on dips at ₹560 with a stop-loss at ₹540 for the target of ₹600.
Revise the stop-loss higher to ₹565 as soon as the contract moves up to ₹575.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
The Crude Palm Oil futures contract traded on the Multi Commodity Exchange (MCX) has shot up from ₹515.4 per 10 kg in the first week of November to ₹567 now.
The rise in the domestic CPO futures contract has been aided by the strong rally in the Malaysian CPO futures contract traded on the Bursa Malaysia Derivatives Exchange.
The MCX contract moves in tandem with the Malaysian CPO contract. The Malaysian CPO contract is on a strong footing from a medium-term perspective which leaves the outlook bullish for the MCX-CPO futures contract.
Outlook
The sharp 16 per cent rally in the Malaysian CPO contract since October has helped it to breach above a key trend-line resistance point at MYR 2,950 per tonne as well as the 61.8 per cent Fibonacci retracement resistance at MYR 3,160 per tonne.
The contract is currently trading close to MRY 3,200 per tonne.
Strong support for the contract is in the range between MYR 2,950 and MYR 2,975.
Dips to this support zone may find fresh buyers coming into the market.
As long as the contract trades above this support, a rally to MRY 3,500 looks likely from a medium-term perspective.
On the domestic front, the MCX-CPO futures contract has breached its key resistance at ₹543 per 10 kg.
The contract is currently poised near ₹567. An immediate rise to ₹580 is possible.
A further break above ₹580 will see the up move extending to ₹600 and thereafter ₹605.
Traders can buy on dips at ₹560 with a stop-loss at ₹540 for the target of ₹600.
Revise the stop-loss higher to ₹565 as soon as the contract moves up to ₹575.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.