The Hindu Business Line : Palm oil seen correcting lower

Malaysian crude palm oil futures ended marginally lower on Friday on weekend profit-taking. . Crucial support at 1,445-47 Malaysian ringgit (MYR) a tonne levels held well for a pullback to 1,461 MYR/tonne. Immediate resistance will be seen at 1,474-78 MYR/tonne.

We still believe prices could slowly edge higher towards 1,566 MYR/tonne in the coming months or even higher towards 1,600 MYR/tonne. Only, an unexpected move below 1,408-10 MYR/tonne can cast doubts on our overall bullish view. The move to 2,003 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 are possibly in a new impulse with the first wave of the impulse ending at 1,504 MYR/tonne and the second wave ending at 1,329 MYR/tonne.

We can now expect the explosive third wave to begin. Unexpected break below 1,400 MYR/tonne, will force us to abandon this count. RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD have gone below the zero line in the indicator suggesting bearishness. Prices are below the short-term 8-day period EMA at 1,458 MYR/tonne indicating short-term bearishness and the 34-day period EMA is at 1,463 MYR/tonne. Therefore, look for palm oil futures to test the resistance levels and correct lower. Supports are at MYR 1,445, 1,434 and 1,424. Resistances at MYR 1,478, 1,489 and 1,517.

(The author is associated with the Multi Commodity Exchange of India Ltd. The views expressed in this column are his own and not that of his employer. 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

Stories in this Section
Bearish undertone could keep crude range-bound

`Growers must contribute to rubber research'

Coonoor tea prices drop

Mixed trend at Kochi tea sale

Palm oil seen correcting lower

COMEX gold may consolidate

Why gold prices move ahead of metals

Lack of investment in mining to impact metals market

Will `terminator' seed tech gain entry?

Malaysia seeks duty cut on palm oil

Hetero to sell bird-flu drug to Indonesia, Bangladesh

`Birdflu scare will affect results'

Bird flu scare impacting egg, chicken market

Karnataka to formulate new fisheries policy

Maradu agri-market records Rs 5-cr biz

AP Markfed seeks hike in share capital