• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gnanasekar. T

Malaysian crude palm oil futures ended lower on Friday on expectations of weak exports and softer energy prices. Malaysian palm oil exports have been rising in the past few months because of strong buying from traditional consumers such as China and Europe.

The state-run Malaysian Palm Oil Board will release August stock and production numbers on Monday. Cargo surveyors SGS, whose numbers are closely tracked by the industry, will issue September 1-10 export figures on the same day.

CPO active November month futures look vulnerable for a fall towards the 1517 Malaysian ringgit (MYR) tonne area in the coming week. Excellent support will be seen at that level being the breakout point of the long consolidation. Failure to find support here can see prices edging lower to 1485 MYR/tonne levels, which happen to be the long-term trend line support point.

A head and shoulder pattern is also seen, which is bearish and favour a fall to 1517 MYR/tonne or even lower to 1485 MYR/tonne levels and subsequently resume the up trend. The move to 2003 MYR/tonne is the end of the fifth wave impulse and a move lower from there is a corrective A-B-C pattern in the making.

We are now in a new impulse with the first wave of the impulse ending at 1,504 MYR/tonne and the second wave ending at 1329 MYR/tonne.

With the way prices have shot, it makes us believe that the third wave is in progress. RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages in MACD are below the zero line in the indicator suggesting bearishness. Prices are below the short-term 8-day period EMA at 1570 MYR/tonne indicating short-term bearishness and the 34-day period EMA is at 1588 MYR/tonne.

Therefore, look for palm oil futures to edge lower and test the support levels.

Supports are at 1545, 1517 and 1485 ringgits. Resistances are at 1580, 1605 and 1626 ringgits.

(The author is the director of Commtrendz Research and in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

More Stories on : Technical Analysis | Oilseeds & Edible Oil

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Ministry plans boost to R&D in plantation sector

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line