Wednesday, February 27, 2013

No Sign Of Recovery For Palm Oil Futures Yet 27th Feb 2013

Wednesday, 27th Feb 2013. There is no indication of recovery for palm oil futures yet judging from Soy oil weakness that continue to last overnight. Other news to follow.

"- U.S. stocks climbed Tuesday after their biggest drop since November as housing and confidence data boosted sentiment. Home Depot Inc. HD +5.69%shares rallied after the retailer hiked its dividend and appoved a $17 billion stock buyback. Making its second triple-digit rise in three sessions, the Dow Jones Industrial Average DJIA +0.84% added 115.96 points, or 0.8%, to 13,900.13. The S&P 500 SPX +0.61%climbed 9.09 points, or 0.6%, to 1,496.94. The Nasdaq Composite COMP +0.43% advanced 13.40 points, or 0.4%, to 3,129.64. "

"- Asian stocks markets ended lower Tuesday as signs of an inconclusive general election in Italy sparked worries that another chapter in Europe’s debt crisis could be opening.

Japan’s Nikkei Stock Average JP:100000018 -0.75%  fell 2.3%, while Australia’s S&P/ASX 200 index AU:XJO +0.51%  declined 1%, Taiwan’s Taiex XX:Y9999 +0.13%  lost 0.8% and South Korea’s Kospi KR:SEU +0.06%  gave up 0.5%. Hong Kong’s Hang Seng Index HK:HSI +0.61%  declined 1.3%, while China’s Shanghai Composite CN:000001 +0.19%  fell 1.4%, staging a sharp afternoon retreat."

"- Oil futures fell Tuesday to mark the lowest settlement of 2013, pressured as Italy’s inconclusive election results fed concerns over Europe’s economy and energy-demand outlook.
Prices failed to see much support even though a rise in consumer confidence and upbeat data on housing implied improved prospects for energy demand in the U.S. Traders expect data late Tuesday and early Wednesday to show a climb in domestic crude inventories. Crude oil for April delivery CLJ3 +0.02%  lost 48 cents, or 0.5%, to settle at $92.63 a barrel on the New York Mercantile Exchange. That was the lowest close for a front-month contract since late December."

"-May Soybeans finished down 3 1/2 at 1431 3/4, 10 3/4 off the high and 11 1/4 up from the low. July Soybeans closed down 3 1/2 at 1418 1/2. This was 13 up from the low and 11 1/2 off the high.
May Soymeal closed up 2.3 at 426.8. This was 6.5 up from the low and 2.5 off the high. May Soybean Oil finished down 1.05 at 49.39, 1.11 off the high and 0.08 up from the low. May soybeans traded lower on the day with support coming from the higher trade in the grain markets but traders noted the upside was limited for soybeans due to a negative technical outlook. The market has moved past the fears of a Brazil Union port strike for now and instead is beginning to turn its attention to rumors that China may have released domestic soybeans out of reserves for domestic crushers. The move has not been confirmed but some suggest it was being done to bridge the supply gap until Brazilian vessels begin to show up. Light buying support may be showing up on reports that soybean yields in Mato Grosso have been coming in below year ago levels but some analysts still anticipate better yields once the harvest pace progresses further."

FKLI- Still Trading Within The Range

Prior to the general election, stock index and index futures are likely trading within the weekly range around 1,640~1,590 area for the moment. Traders can actually guess what is the market sentiment at the moment by looking at these range. Most investors are just holding for short term rather than exposing themselves with large positions as we would not know the post effect after the general election or approaching the election. Be prepare for any set back if there is some major political event such as massive riots or unexpected event occur locally that would jeopardize our country's political stability. Traders can expect some massive correction to happen if there is any negative political event arise in next few months. But for time being, market should be able to recover if it fell down around 1,590 and retrace if it approach around 1,635~1,640 area. Now we know the golden range, safety stops can be easily identified too. A good Sell Stop to cover your Long positions is recommend to place below the major support level around 1,585 level while an ideal place to put your Buy Stop will be above resistance area around 1,643~1,645 level. Even when the stop has been taken out, traders can just turn their positions along with the break out because for the market to take out your stops there must be a breakout above or below the specified range mentioned above. For today, pivot support for the March contract is located around xx while resistance is pegged at xx.

Daily Pivot Point
R2= 1627
R1= 1622
S1= 1611
S2= 1606

FCPO- Sell-Off Is Likely Continue

Palm oil futures can have another round of sell-off soon judging on continue weakness on Soy oil recently. Overstocks and active productions concern due to favourable weather conditions in the South America is likely the factor why previous profit taking activities turn ugly into a massive corrections on Soy oil. Meanwhile for palm oil futures, price met serious resistance around 2,580~2,600 level and the Bulls gave up the fight after it rose up to 2,585 level on 20th Feb 2013, Wednesday. Bears quickly overpowered the market and took over by open gaping down on Friday, 22nd Feb 2013. At this point of time, it will be suicide to hold Long positions over the weekend as market is not in a good shape for recovery. The first market weakness was indicate when the market went down on 20th Feb after it failed to rally above 2,600 level and retrace after that, it was also the first lower high formed on the hourly chart. The second weakness which is a gap down serve as a stern warning for the Long holders to exit their positions as candle formation is now formed to be lower high and lower low. These Bearish candle formation only mean one thing in particular, "Bearish." And when these Bearish candle formation formed at the peak of recovery, it have so much room to fall and it did. For today, even the market has been oversold for a while, I do not foresee any sign of recovery yet. The benchmark May is likely open lower again today and continue to head south. Pivot support is not significant when the market is free falling, pivot point for resistance will serve better indication for the market to stop recovering.

Daily Pivot Point
R2= 2497
R1= 2457
S1= 2394
S2= 2371
Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.


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