Comments
Malaysian palm oil futures on the Bursa Malaysia Derivatives edged lower on Monday dropping to a nine-month low on weakness in the soya complex and a firm local currency once again dampening sentiment. Exports showed a positive trend for a change.
Cargo surveyor Intertek Testing Services reported that exports of Malaysian palm oil products during July 1-20 rose 7.8 per cent from a month before to 868,843 tonnes due to bigger shipments to Europe and China. Exports to China nearly doubled compared with the same period in June.
Crude palm oil active month October futures are lower as expected. As mentioned in the previous update, a move below MYR 2,375/tonne could hint at weakness again possibly targeting 2,250 on the downside. Several targets are seen being tested in the coming sessions on the break below 2,275 levels.
Strong support will be seen near MYR 2,265-75 followed by important support at 2,245- 50 . Below here the market could be inclined to test further lows near MYR 2,185 levels too.
Though the undercurrent is weak, prices are displaying bullish tendencies.
Prices are holding well above 2,275-85 levels and this gives us a feeling that an up move or pullback looks likely in the coming sessions. Initial resistance will be seen towards towards 2,355-65 initially or could even extend towards 2,395-2,400 levels.
Though, the downtrend still remains intact, the downside from here also looks limited. Favoured view expects a pullback higher.
As mentioned earlier, prices met an intermediate wave target at MYR 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 now. The fifth wave possibly ended at MYR 2,898/tonne and a corrective A-B-C in progress with an equality target now stretching to 2,185 levels now.
RSI is in the oversold zone now indicating a possible upward correction.
However, the averages in MACD are still below the zero line of the indicator hinting at a bearishness to be intact. Only a crossover again above the zero line could at resumption in the bullish trend.
Therefore, look for palm oil futures to rise again.
Supports are at MYR 2,265, 2,245 and 2,185. Resistances are at MYR 2,365, 2,400 and 2,435.
The author 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.