The Hindu Business Line : Palm oil may consolidate, rise

CPO active August contract tested the support levels in line with our expectations. As mentioned in the previous week's update, the indications are that we are in a good corrective retracement now, but it won't be surprising to see CPO futures making a shy at the recent high or even higher after this correction ends.

As seen in the chart, the fibonnaci retracement level held well at 2235-40 Malaysian ringgit (MYR) tonne. Immediate resistance will be at 2525 MYR/tonne levels followed by 2665 MYR/tonne.

Unlike, in the recent past weeks, we expect prices to move in an orderly fashion with good corrections and retracements.

A new impulse began from 1427 MYR/tonne as per the recent wave counts.

We are in the fifth wave move of that impulse. We can expect a corrective A-B-C to begin now.

RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages in MACD are still above the zero line in the indicator suggesting bullishness to be intact. The short-term 8-day period EMA and 2-day period EMA is at 2438 MYR/tonne indicating bullishness in the offing. Therefore, look for palm oil futures to consolidate and rise higher.

Supports are at MYR 2378, 2315 and 2240. Resistances are at MYR 2565, 2655 and 2764.

(The author is the Director of Commtrendz Research and also 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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