Sunday, March 25, 2012

Crude palm oil futures outlook march 26-30 2012

Crude palm oil futures outlook march 26-30 2012, cpo outlook march 26 2012 ; Malaysian palm oil futures on Bursa Malaysia Derivatives exchange ended sharply higher on Friday on upbeat demand outlook expectations of a drop in production further bolstering sentiment. CPO futures tanked lower during the week after data showed China's economic momentum slowed in March as factory activity shrank for a fifth straight month, leaving investors fretting about the risks to global growth.

However, robust US economic data and picking up of economic activity there helped calm nerves and a weakening dollar boosted sentiment further. Malaysian exports jumped 14 per cent for the first 20 days of March from a month ago, according to cargo surveyors, and market players are expecting the trend to continue for the March 1-25 data due on Monday.

CPO May futures moved higher perfectly in line with our expectations. As mentioned in the previous update, possibility of rise higher towards 3,700 Malaysian ringgit (MYR) a tonne in the coming months looks likely. Also, due to some exhaustion signs and overbought conditions seen in the trend, the rally could pause and take a breather. We saw corrective dips to 3,335 MYR/tonne holding dips and a sharp rally higher from there again. Resistances are clustered around 3,465-70 MYR/tonne zone now. This also happens to be a critical point being an inverse head and shoulder neckline point as seen in the chart above. Once above here, possibility exists for a push higher towards 3,550 MYR/tonne followed by 3,600 MYR/tonne. Only a fall below 3,355MYR/tonne could turn the picture neutral again.

We believe the impulse that began from 1,427 MYR/tonne, which hit 4,486 MYR/tonne ended and a prolonged corrective move has possibly ended at 1,335 MYR/tonne. In the big picture, a new impulse began from 1,335 MYR/tonne and the third wave with a projected objective of 3,900 MYR/tonne has been met. A corrective wave “B” has met one potential target near 3,465 MYR/tonne. A wave “C” kind of a decline ended at 2,755 MYR/tonne itself. A possible new impulse has begun now with immediate near-term targets in the 3,465 MYR/tonne range and long-term targets at 3,700 MYR/tonne. RSI is in the overbought zone now indicating that a possible downside correction. The averages in MACD have are above the zero line of the indicator indicating a bullish reversal. Only a cross-over again below the zero line again could hint at resumption in the down trend.

Therefore, look for palm oil futures to test the resistance levels and then correct lower.

Supports are at MYR 3,410, 3,385 and 3,345. Resistances are at MYR 3,465, 3,500 and 3,550.

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