The Hindu Business Line : Bullish trend in palm oil

Malaysian crude palm oil futures ended higher but off the highs in spite of a bullish outlook given by various industry experts at a conference in Indonesia. Weather-related problems in Indonesia and Malaysia are expected to result in lower production in the coming year. However, falling CBOT soyaoil futures and a slightly weakening trend in exports is expected to cap any major advances in CPO futures from current levels.

CPO active February month contract corrected lower as expected. As mentioned in the previous update, a good correction is needed to attract more buying in palm and there are technical gaps to be filed on the way down.

The overall trend still remains firmly bullish. Important support is at the 38.2 per cent fibonnaci retracement point at 1792 myr/tonne, which also coincides with a gap as seen in the chart above. As long as prices stay below 1906 myr/tonne, expect prices to edge lower to 1792 myr/tonne levels in the coming sessions. 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 the powerful third wave impulse. RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD are above the zero line in the indicator suggesting bullishness to be intact. Prices are above the short-term 8 period ema at 1,862 myr/tonne and the 34 period EMA is at 1787 myr/tonne. Therefore, look for palm oil futures to test the support levels.

Supports at, 1,827, 1,798 & 1,785 ringgits. Resistances at, 1,875,1,906 & 1949 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
`Active' weather conditions return to north, south

Comex gold: Downtrend may continue

Bullish trend in palm oil

`Cashew apples may help bring in additional revenue'

Dip in pepper futures prices likely to help investors

Uncertainty looms in major commodity markets