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Malaysian crude palm oil futures ended lower dragged down by losses in rival CBOT soya oil futures. Export figures were not very encouraging. Societe Generale de Surveillance, said exports during the period fell 10.3 per cent to 858,485 tonnes.

More fundamental data is expected next week to provide more clues on market direction from here. The state-run Malaysian Palm Oil Board will release February exports, output and stocks data on March 12. On the same day, cargo surveyors will unveil export numbers for March 1 to 10.

CPO active May contract has moved lower again, moving in a narrow range with a negative bias. As mentioned earlier, trend line resistance above 1985 Malaysian ringgit (MYR) tonne, was quite strong. Prices are now expected to find support in the 1911-15 MYR/tonne region.

Failure to hold support will lead to a further test of 1883 MYR/tonne on the downside, from where prices are expected to bounce higher again. 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 could be possibly tracking a fourth wave correction, which has some more room left on the downside. 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.

Prices are below the short-term 8-day period EMA at 1945 MYR/tonne indicating short-term bearishness and the 34-day period EMA is at 1914 MYR/tonne. Therefore, look for palm oil futures to test the support levels.

Supports are at 1915, 1885 and 1823 ringgits. Resistances are at 1945, 1985 and 2005 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.)

Gnanasekar T.

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