CRUDE PLAM OIL
THE Bursa Malaysia Derivatives crude palm oil futures prices fell in sympathy with weakness in the Chicago Board of Trade soyoil futures prices following a record US soybean harvest forecast for 2004 and bearish reaction to the lower Malaysian palm oil exports for the first-half of October.
Cargo surveyor Societe Generale de Surveillance estimated Malaysian palm oil exports for the first-half of October to be 11% lower at 601,800 tonnes compared to 675,647 tonnes during the same period in September.
The December 2004 crude palm oil futures prices fell from a weekly high of RM1,430 to RM1,385 per tonne and settled the week near the intra-week low at RM1,387, down RM37 per tonne from previously. Total volume for the week declined sharply to 28,497 contracts from 41,386 a week ago. Open interest as at Thursday's close improved slightly to 35,648 contracts from 33,333 previously.
The daily candlestick chart closed the week negative, indicating that the immediate momentum is weak. There were five black candles last week. Although these candles were not big enough to qualify as black crows, the steady downward pattern is mildly bearish.
Based on the daily chart, the December 2004 futures immediate chart support is seen lower this week at the RM1,380 to RM1,360 level. Failure to rebound from this level and violation of these 14-week lows would signal the continuation of the downward cycle. Chart resistance for this week is seen at the RM1,400 to RM1,410 level.
The daily stochastic remained negative and closed deep in the bearish extended move zone during Friday’s close. The oscillator per cent K settled below the oscillator per cent D and ended the week sharply lower at 4.259% and 8.857% respectively. Analysis of the daily stochastic indicates that the market is in a bearish extended move.
The 3-day and 7-day exponentially smoothed moving average price line (ESA line) closed the week with a strong negative divergence and signalled that the downward cycle is continuing. The 3-day and 7-day ESA lines settled the week lower at 1,394 and 1,407 points respectively.
The daily moving average convergence/ divergence (MACD) (not shown in the chart) gave the sell signal on Oct 11 and stayed bearish during Friday’s close. The daily MACD settled the week below the trigger line and ended lower at minus 13.38 points and minus 11.71 points respectively. Based on the MACD, the immediate term trend would likely stay negative.
The 9-day RSI dropped from a weekly high of 43.75 points on Oct 12 and ended lower near the oversold territory at 33.43 points.
THE Chicago Board of Trade soyoil futures prices started the week slightly higher and then headed south for the rest of the week dampened by the bearish United States Department of Agriculture (USDA) 2004 US soybean production estimate released last Tuesday.
USDA forecast a record production of 3.107 billion bushels, above analysts’ average estimate of 3.026 billion and sharply higher than the 2001 production record of 2.891 billion.
The December soyoil futures prices declined from a weekly high of 21.05 US cents to 19.50 US cents and ended the week slightly lower at 20.50 US cents, off 0.11 US cents from a week ago.
The daily candlestick chart settled the week neutral to slightly positive and called for more sideways band trading this week.
The daily chart shows an immediate support for this week at the 20.30 to 20.10 US cents level. The downward momentum would likely expand if these levels are violated. Chart resistance for this week is adjusted lower to the 20.70 to 20.85 US cents level.
The daily technical indicators ended the week positive and indicated that the market would hold in band trading with a slight upward bias this week.
The daily stochastic triggered the buy signal on Oct 13 for the start of a mild upward wave. The daily oscillator per cent K closed above the oscillator per cent D and ended the week lower at 33.98% and 27.09% respectively.
The daily moving average convergence/ divergence (MACD) signalled a positive trend-change for the near term.
The 3-day and 7-day exponentially smoothed price lines (ESA) indicated a strong positive convergence and shows that the market had reached a temporary bottom. The 3-day and 7-day ESA lines ended the week lower at 20.36 and 20.51 respectively.
The 9-day Relative Strength Index (RSI) rebounded from a weekly low of 27.23 points on Oct 12 and settled the week higher at 40.00 points.
COCOA futures prices on the Coffee, Sugar & Cocoa Exchange in New York rebounded on moderate active technical covering last week and closed with moderate gains.
Speculative and fund buying motivated by a weaker US dollar and news that Ivory Coast farmers are refusing to sell beans supported sentiment last week.
The December 2004 cocoa futures prices advanced from a weekly low of US$1,404 to US$1,480 and eased slightly to end the week higher at US$1,457, up US$32 a tonne from previously.
The candlestick chart ended the week neutral to slightly positive. The two white candles on Thursday and Wednesday had long upper shadow and indicated that the market is facing strong overhead resistance.
Chart resistance for the immediate term is seen at US$1,460 to US$1,480. A push above this level would signal the resumption of the upward cycle. Chart support for this week is adjusted higher to the US$1,440 to US$1,430 level.
The daily technical indicators ended the week bearish positive and signalled that the positive trend would continue this week.
The daily stochastic triggered the buy signal last week and closed on a neutral setting. The daily oscillator per cent K ended above the oscillator per cent D and closed sharply higher at 69.15% and 65.14 % respectively. Analysis of the stochastic shows that the upward cycle would continue.
The 3-day and 7-day exponentially smoothed average price line (ESA line) gave the trend reversal signal last week and closed Thursday positive. The 3-day and 7-day ESA-lines closed the week higher at 1,444 and 1,436 respectively.
The daily moving-average convergence/ divergence (MACD) triggered the buy signal early last week and indicated the start of an upward leg. The daily MACD and trigger line settled the week higher in the negative territory at minus 25.66 and minus 28.50 points respectively. The 9-day Relative Strength Index (RSI) recovered from a weekly low of 40.00 points and closed higher in the positive territory at 53.53 points.
TIN prices on the Kuala Lumpur Tin Market turned volatile last week. Prices initially plunged on aggressive selling and declined to the lowest levels in 11 weeks where buying interest emerged and finally settle the week with minor losses.
The cash tin prices closed US$120 lower at US$8,930 per tonne. Trade for the week fluctuated widely from US$9,130 to US$8,730 per tonne. Total trading volume dropped to 540 tonnes from 665 a week ago. The daily candlestick chart closed the week negative. A big black candle occurred last week. This signalled that the market’s immediate momentum could remain bearish this week.
Chart support for this week is adjusted lower to the US$8,900 to US$8,850 per tonne level. A break below this level would turn the immediate chart picture bearish. Chart resistance for this week stands at the US$8,950 to US$9,000 level.
The weekly indicators ended the week neutral to slightly positive and indicated that the market would ease further this week.
The weekly stochastic indicated a strong negative convergence during Friday’s close and called for further declines this week. The weekly oscillator per cent K and D closed sharply lower and out of the bullish extended move zone at 76.71% and 74.15% respectively.
The weekly moving average convergence/ divergence indicated that a bearish cycle had started for the near-term trend.
The 3-week and 7-week exponentially smoothed average price lines (ESA lines) indicated a strong negative convergence and is warning that a downward cycle is about to begin. The 3-week and 7-week ESA lines settled the week lower at 8,977 and 8,974 points respectively. The 9-week Relative Strength Index (RSI) closed the week lower at 50.44 points.
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