Comments
Malaysian palm oil futures on Bursa Malaysia Derivatives Exchange ended lower as a stronger ringgit dampened sentiment despite expectations of tighter inventories. Festive buying optimism and falling stocks continue to underpin prices. Demand is expected to rise ahead of the Muslim fasting month of Ramadan and Eid, which starts in June. Energy prices were firmer and supportive for the edible oil complex, due to developments in Ukraine and also the strong jobs growth in the US as seen on Friday. However, prices could remain caught in a range till the release of data on stocks, production and exports by the official MPOB in the coming week.
Crude palm oil active month June futures are moving on expected lines. As mentioned earlier, potential downside targets are at 2,610-20 ringgit (MYR) a tonne zone, also being another important trend line support point. Though prices have rebounded from there, price structures do not indicate a clear trend either way. A break below 2,595 could drag prices lower towards 2,550-65 levels from where a possible intermediate bottom can be seen. However, a break above 2,660 could hint at strength again which could potentially push prices higher towards 2,730-35 levels, strong resistance in the coming sessions. Expect prices to edge higher either after testing the above mentioned supports or directly moving above 2,660 levels.
As mentioned earlier, prices met an intermediate wave target at 2,135 and corrective decline to 2,345-50 levels, followed by a sharp third wave move to 2,575-2,600 materialised. Price structures suggest a possible third wave move ending at 2,690 and a corrective, fourth wave with targets at 2,450 or even lower. The fifth wave possibly ended at 2,898 and a corrective A-B-C in progress with an equality target at 2,615-20 levels. RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD have gone below the zero line of the indicator hinting at a bearish reversal. Only a crossover again above the zero line could at resumption in the bullish trend.
Therefore, look for palm oil futures to test the support levels and climb again in the coming sessions.
Supports are at MYR 2,595, 2,555 and 2,525. Resistances are at MYR 2,660, 2,705 and 2,735.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.