• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Malaysian palm oil futures ended higher on Friday on expectations of robust exports. Data due out Monday is expected to show good palm oil exports during the first 25 days of April due to tightness in stocks. Top producers Indonesia and Malaysia could see palm output fall in April-June, rather than a gradual increase as usually expected, driving total stocks down by more than half to below 2.5 million tonnes. Energy prices too rose as gains in the stock market outweighed r ising inventories in top consumer the US underpinning the edible oil complex.

CPO Active July futures are moving higher in line with our expectations. As expected we saw a corrective dip on the back of extremely overbought conditions towards 2,375 Malaysian ringgit/tonne (MYR/tonne) levels before resuming the climb higher. Potential now exist for a test of 2,730/55 MYR/tonne or even higher towards 2,910 MYR/tonne. Important near-term support is at 2,530/35 MYR/tonne followed by 2,480 MYR/tonne, being a trend line support point. Favoured view expects supports to hold for a test of above mentioned targets. Unexpected fall below 2,425 MYR/tonne could dash our bullish hopes. A new impulse began from 1,427 MYR/tonne and this could be the third wave, which has at 4,486 MYR/tonne. A prolonged corrective fourth wave in the form of A-B-C is in progress now. Subsequently, wave “C” could begin with possible targets extending even lower towards 1,200 MYR/tonne. This could materialize on a daily close below 2,050 MYR/tonne. RSI is in the highly overbought zone now, indicating that a downside correction is due in the coming sessions. The averages in MACD are above the zero line of the indicator indicating bullishness. A crossover below could once again begin a bearish trend. Therefore, look for palm oil futures to rise higher and then correct lower subsequently.

Supports are at MYR 2,535, 2,480 and 2,423. Resistances are at MYR 2,625, 2,730 and 2909.

Gnanasekaar .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.)

More Stories on : Technical Analysis | Oilseeds & Edible Oil

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line