MALAYSIA Derivatives Exchange (Mdex) crude palm oil futures prices was pressured lower in a strong wave of technical selling in early trading and slipped below the RM1,600 a tonne level for the first time in nine weeks and rebounded sharply towards mid-week on renewed buying enthusiasm to finally closed the week with small gains.
The steady cash product market, improved export movement and renewed buying-interests from India and China helped firmed values in the futures market last week.
The benchmark third-month April 2003 futures rebounded from an intra-week low of RM1,582 to RM1,638 and closed the week slightly higher at RM1,627, up RM7 per tonne from a week ago.
Chart-wise, the April 2003 crude palm oil futures ended the week neutral-to-slightly positive. The strong technical rebound last week has resulted in the market recovering almost 50% of its earlier losses and unless the bullish recovery momentum continues into the early part of this week’s trading, the market could settle for a mild technical pullback. Chart-support is seen this week at the RM1,600-RM1,610 level. Violation of this immediate chart-support would indicate that that a downward wave has started. An immediate overhead resistance for this week is peg at the RM1,645-RM1,640 level. Penetration of this trading barrier would clear the way for a test of the 2003 highs at the RM1,660-RM1,670 level.
The daily technical indicators closed the week mixed and point to the possibility of a tight band-trading session this week.
The daily stochastics triggered the buy-signal on Jan 22 and managed to end the week positive. The oscillator per cent K and D settled the week sharply higher at 80% and 50.40% respectively. Analysis of the daily oscillators indicates that the market is in an upward wave.
The 3-day and 7-days exponentially smoothed moving-average price-line (ESA-line) triggered the buy-signal on Friday’s close and signalled that a positive cycle has started. The 3-day and 7-day ESA-lines closed the week higher at 1,624 and 1,623 points respectively. Presently, the ESA-lines had confirmed that the market would remain in upward trend.
The daily moving-average convergence/divergence (MACD) retained its negative signal and indicated a strong positive convergence during Friday’s close. The daily MACD ended the week below the trigger-line and closed the week sharply lower at minus 1.57 points and 0.36 of a point respectively. Analysis of this oscillator shows that the market is attempting a minor trend change.
The daily momentum index (MI) remained below 100-point mark during Friday’s close and settled the week lower at 97.84 points. Analysis of MI suggests that the market is not totally out of its negative phase.
Soyoil futures at the Chicago Board of Trade (CBOT) resumed its upward momentum last week and settled Thursday moderately higher boosted by fresh commercial buying. The rally following a new three-month low was influenced by talks that China may have sold off a maximum of six cargoes of Brazilian beans. In the event that China sells back Brazilian beans because of no agreement on genetically modified import rules, they would resort to the US for replacement for those beans.
The March 2003 futures prices recovered from a weekly-low of 20.13 US cents to 20.67 US cents and closed Thursday slightly higher at 20.53 US cents, up 0.26 US cents per lb. from previously.
Chart-wise, the March 2003 soyoil futures prices ended the week slightly bullish and have the potential to trend higher this week. Chart resistance for this week is adjusted higher from a week ago to the 20.80-20.90 US cents per lb. levels. A successful push above this immediate chart-resistance could take the market higher to test its minor chart hurdle above the 21.00 US cent level. Chart-support for this week stands at the 20.10-20.20 US cent levels. The main bearish trend would resume if these supports were to be breached.
The daily technical indicators closed the week slightly bullish and called for a continuation of the upward recovery this week.
The daily stochastics expanded on its buy-signal of Jan 16 and closed Thursday on a positive note. The daily oscillator per cent K settled above the oscillator per cent D and ended sharply higher at 68.53% and 51.01% respectively. Analysis of the daily stochastics indicates that the market’s upward wave is intact and is likely to continue into this week’s trading.
The daily moving-average convergence/divergence (MACD) triggered the buy-signal and indicated that a cycle change had started. The daily MACD ended above the trigger-line and closed higher at minus 0.34 and 0.35 of a point respectively.
The 3-day and 7-day exponentially smoothed moving-average price lines indicated that a bullish cycle had started. The 3-day and 7-day ESA-lines ended the week higher at 20.43 and 20.42 respectively.
The daily momentum index (MI) closed the week higher but remained in the negative territory at 97.99 points. Based on the MI reading, the market’s immediate term trend is still negative.
Cocoa futures prices on the Coffee, Sugar & Cocoa Exchange (CSCE) in New York ended Thursday sharply higher and established new three-month highs on aggressive buying by commodity funds. Traders said that little news came out of the peace talks currently held in Paris to end the bloody civil war in the Ivory Coast and trading sentiment shows that the talks may not be able to resolve the problems immediately.
The March 2003 cocoa prices rocketed from a weekly-low of US$2,122 to US$2,250 and settled the week sharply higher at US$2,225, up US$74 per tonne from a week ago.
Chart-wise, the March 2003 cocoa futures prices ended the week at its life-of-contract highs and are technically bullish for the immediate term market. An immediate chart-support for this week is seen at the US$2,200-US$2,180 level. The bullish momentum is expected to be sustained if these levels are not violated. Chart resistance for this week is peg at the 2,250-2,260 levels. Penetration of these life-of-contract highs trigger-off another strong wave of technical buying and take the market beyond the US$2,300 per tone level.
The daily technical indicators ended the week bullish and points to more bullish trading this week.
The daily stochastic remained bullish and ended near the bullish extended-move zones. The daily oscillator per cent K settled above the oscillator per cent D and closed higher at 81.84 and 75.99 % respectively. Analysis of the daily stochastic shows that a strong negative convergence has started.
The 3-day and 7-day exponentially smoothed average price-line (ESA-line) closed the week bullish. The 3-day and 7-day ESA-lines settled the week lower at 2,190 and 2,160 respectively. Analysis of the ESA-line shows that the market is in an upward cycle.
The daily moving-average convergence/divergence (MACD) triggered the buy-signal on January 23 and indicated that the market’s main trend had turned bullish. The daily MACD and trigger-line closed higher in the positive zones at 49.10 and 47.06 points respectively.
The daily momentum index (MI) remained in the positive territory and settled lower at 101.60 points. The decline in the MI shows that the market’s momentum is slightly negative.
Tin prices on the Kuala Lumpur Tin Market (KLTM) advanced to fresh 19-month highs and eased on late trading on profit-taking pressure and closed with strong gains.
The cash tin prices settled the week sharply higher at US$4,525 per tonne, up US$85 per tonne from a week ago. Trading range for the week widened from US$4,550 to US$4,430 per tonne.
Total volume for the week eased marginally to 224 tonnes from 277 tonnes a week ago.
Chart-wise, the cash tin prices closed the week bullish and continues to signal that the upward bullish momentum would sustain this week. Chart-support for this week is raised to the US$4,500- US$4,450 per tonne level. The immediate trend is considered to be technically positive if these levels are not breached. Chart-resistance for this week stands at the US$4,580- US$4,600 level.
The weekly technical indicators ended the week positive and suggested further upward trading this week.
The weekly stochastics retained its buy-signal and closed the week in the bullish extended-move zones. The weekly oscillator per cent K and D settled higher at 86.41% and 75.99%. Analysis of the weekly stochastics showed that the market’s upward strength could be sustained.
The weekly moving-average convergence/divergence (MACD) stayed bullish for the near-term market and called for more upside trading this week. The MACD and the trigger-line settled higher in the positive territory at 0.076 and 0.061 of a point respectively.
The 3-week and 7-week exponentially smoothed average price-lines (ESA-lines) finished positive and signalled that the market’s bullish course is not over. The 3-week and 7-week ESA-lines closed the week higher at 4,450 and 4,320 respectively.
The weekly momentum index ended above the 100-point mark and closed slightly higher at 106.97 points. Analysis of the weekly MI indicated that the market’s main trend is bullish.
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