Comments
Malaysian palm oil futures on the Bursa Malaysia Derivatives ended higher on Monday, as a monthly cargo surveyor export data and a weak ringgit combined to support prices.
On the data front, exports of Malaysian palm oil products for September 1-20 rose 7.6 per cent, cargo surveyor Intertek Testing Services said. CPO active month December futures retreated from recent highs.
As mentioned in the previous update, the technical picture is turning gradually friendly now. A close above MYR 2,070/tonne levels has revived hopes of a bullish turnaround. Prices have been moving in decent volumes compared to earlier weeks. This could mean that a genuine reversal in trend could be underway.
Strong resistance can be seen around 2,265-75 levels. Potential exists for prices to further stretch towards 2,335 levels too, being a significant medium-term resistance level. Any dips to 2,065-70 followed by 2,030-35 levels is expected to hold supports in the coming sessions.
Only a fall below MYR 1,995/tonne levels could force us to abandon our bullish view. In the coming week, we expect prices to consolidate with a bullish bias and inch higher towards stronger resistances towards 2,220 levels followed by stronger resistance at 2,255-60 levels.
We will have to once again review the wave counts, but will wait for a crossover above MYR 2,370-2,400to do that. Till then we will stick to our earlier assessment.
As mentioned earlier, a downtrend again could be confirmed on a close below 2,175 levels. This once again puts the spot light on the MYR 1,700/tonne mark, which we were expecting earlier. We are now tracking the final leg of an impulse in a declining trend with potential targets near 1,850 or even lower to 1,700 levels.
Ideally, the next leg of a larger up move could potentially begin from this area. But a direct rise above 2,400 in huge volumes could indicate a turnaround suggesting a possible move to 2,800 later in the year.
RSI is still in the neutral zone now indicating that it is neither overbought nor oversold.
The averages in MACD have gone above the zero line of the indicator hinting a bullish reversal. Only a crossover again below the zero line could hint at a resumption of the bearish trend.
Therefore, look for palm oil futures to test the resistance levels.
Supports are at MYR 2,125, 2,070 and 2,030. Resistances are at MYR 2,176, 2,220 and 2,260.
The writer is the Director of Commtrendz Research. There is risk of loss in trading.
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.