• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gnanasekar. T

Malaysian crude palm oil futures ended higher on Friday fuelled by rising crude oil prices. However, lack of demand capped further gains as stocks of palm oil surged higher and exports still remain dismal.

Exports of palm products for July 1-10 stood at 356,093 tonnes, up just 0.7 per cent from June 1-10, according to cargo surveyor Societe Generale de Surveillance. Robust demand from China and Europe are expected to rejuvenate exports coupled with upcoming festival demand in a few months.

CPO active month futures are moving in line with our expectations. No change in view. Important near-term resistance is at 1523-25 Malaysian ringgit (MYR) tonne being the long-term trend line resistance point.

A daily close above this point should result in further strengthening of prices targeting 1575-85 MYR/tonne followed by 1631 MYR/tonne.

A good base has been formed at 1478-80 MYR/tonne levels, and as long as this level remains undisturbed, expect CPO futures to strengthen further. We will continue to stick with the same favoured wave counts.

The move to 2003 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 1329 MYR/tonne.

We can now expect the explosive third wave to begin. RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages in MACD are above the zero line in the indicator suggesting bullishness.

Prices are above the short-term 8-day period EMA at 1496 MYR/tonne and the 34-day period EMA is at 1478 MYR/tonne. Therefore, look for palm oil futures to test the resistance levels. Supports are at 1491, 1478 and 1454 ringgits. Resistances are at 1525, 1565 and 1585 ringgits.

(The author is the director of Commtrendz Research and 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

Stories in this Section
Project to bolster organic farming

Copyright © 2006, 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