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Malaysian crude palm oil futures ended flat on Friday as the market awaited further clues for direction. CPO active month contract bounced higher, but still lacks the momentum to sustain and push higher. As expected we saw a bounce higher towards 2450 Mayalsian ringgit (MYR)/tonne levels. Further gains could be seen towards the psychological 2500 MYR/tonne levels. However, good resistance will be noticed there and it also happens to be the long-term trend line support poin t it broke while on its way down.

Only a rise above 2550 MYR/ton could rekindle bullish hopes again. 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 after the current impulse ends.

RSI is in the neutral zone indicating that it is neither overbought nor oversold and has started showing signs of minor negative divergence indicating bearishness to set in soon and caution against aggressive longs. The averages in MACD have gone below the zero line in the indicator suggesting bearishness. Therefore, look for palm oil futures to rise higher initially and then correct lower again.

Supports are at MYR 2325, 2285 and 2210. Resistances are at MYR 2450, 2478 and 2565.

Gnanasekhar T.

(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 pr ice movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

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