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

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 short-covering helped by prospects of good exports going forward. Exports appear to be rebounding. Cargo surveyor Societe Generale de Surveillance said on Friday that Malaysian palm oil product exports during September 1-25 rose 3.9 per cent to 1,042,281 tonnes from the same period a month ago. The volatility in the soya complex on the back of adverse weather saw prices seesawing throughout the week. By mid-ctober over 5 0 per cent crop would have been harvested as such, market has started giving up weather risk premium. However, South American supply tightness continues which could once again support prices and in turn boost CPO prices.

CPO futures pulled back higher in line with our expectations. As mentioned in the previous update, prices could test important supports and then rise higher. Friday’s pullback has been impressive and follow through buying from here could take out the near-term resistance at 2,210 Malaysian ringgit (MYR) a tonne for December CPO futures. Potential resistance going forward is at 2,265 MYR/tonne followed by very important resistance at 2,320 MYR/tonne. Important support for December futures is at 2,121 MYR/tonne in the coming week. However, a daily/weekly close below this level could damage any bullish prospects for CPO. Fall below 2,095 MYR/tonne could indicate further weakness again. Only a rally above 2,275 MYR/tonne could re-inforce bullish expectations again.

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. A possible wave “C” could have begun with possible targets extending even lower towards 1,200 MYR/tonne. This could be negated on a rise above 2,500 MYR/tonne and a fresh review of the wave counts. RSI is in the neutral zone now, indicating that it is neither overbought nor oversold. The averages in MACD are below the zero line of the indicator indicating bearishness. A cross over above the zero line again could indicate a bullish reversal. Therefore, look for palm oil futures to test the resistance levels.

Supports are at MYR 2,178, 2,121 and 2,045 . Resistances are at MYR 2,223, 2,275 and 2,320.

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