The Hindu Business Line : Palm oil still looks bearish

CPO active month contract moved in line with our expectations in the 2500 Malaysian ringgit (MYR) tonne zone. Strong resistance will be seen at 2550-60 MYR/tonne levels, where it is expected to find strong resistance. Supports are at 2450 MYR/tonne and ideally this should hold supports.

However, an unexpected fall below this support could be a bearish sign. Only a daily close above 2550 MYR/tonne could rekindle bullish hopes again.

Favoured view still expects supports to hold for a rise towards 2550 MYR/tonne in the coming week as long as 235 MYR/tonne holds declines.

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. Negative divergences seen in the indicator resulted in a corrective fall as mentioned in the previous update. The averages in MACD are below the zero line in the indicator bearishness to be intact. Therefore, look for palm oil futures to test the resistance levels.

Supports are at MYR 2450, 2365 and 2325. Resistances are at MYR 2485, 2550 and 2595.

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

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