Tuesday, April 2, 2013

Palm Oil Making Another Double Bottom ? 2nd April 2013

Tuesday, 2nd April 2013. BMD commodity futures went down another session to 9 weeks low yesterday as demand is expected to be weak for the month. Other news to follow.

"- U.S. stocks lost ground on Monday, with two benchmark indexes retreating from record highs, after a closely watched manufacturing gauge unexpectedly declined in March. After rising as much as 27 points and falling as much as 47 points, the Dow Jones Industrial Average DJIA -0.04%  ended down 5.69 points, or less than 0.1%, at 14,572.85. The S&P 500 index SPX -0.45%  fell 7.02 points, or 0.5%, to 1,562.17, with industrials and technology hardest hit among its 10 major sectors. After ending March at an all-time high, and recording its best quarterly rise in a year, the S&P 500 remains below its intraday high of 1,576.09. The Nasdaq Composite index COMP -0.87% lost 28.35 points, or 0.9%, to 3,239.17 on Monday, as Apple Inc. shares AAPL -3.11%  dropped 3.1%."


"- Oil futures settled lower on Monday to mark their first decline in six sessions, as traders showed disappointment over the pace of expansion in the U.S. manufacturing sector, which bodes ill for potential energy demand. But prices still finished off the session’s low to hold their ground above $97 a barrel as petroleum-product prices found some support from a threat to supply. Crude oil for May delivery CLK3 -0.19%  fell 16 cents, or 0.2%, to settle at $97.07 a barrel on the New York Mercantile Exchange, after touching a low under $96. The contract had tallied a gain of around 5% over the past give trading sessions. Nymex trading was closed on Friday for a holiday."

"-May Soybeans finished down 14 at 1390 3/4, 17 1/2 off the high and 4 1/2 up from the low. July Soybeans closed down 13 1/4 at 1372 1/4. This was 5 1/2 up from the low and 16 off the high.
May Soymeal closed down 5.1 at 399.5. This was 3.1 up from the low and 6.8 off the high. May Soybean Oil finished down 0.05 at 50.06, 0.44 off the high and 0.74 up from the low. May soybeans traded lower on the day on spillover pressure from sharply lower trade in the corn and wheat markets. Basis bids in the Gulf held steady to slightly firmer on rumors that China may have stepped back into the market late last week to book spot cargos as vessels continue to be bottlenecked in the ports of Brazil. On the other hand, traders suggest Chinese demand for soybeans may be revised lower from 63 million tonnes given recent trends in bookings and a slump in domestic hog prices. A well-known investment bank lowered their 3-month price outlook for soybeans to $13.50 a bushel, down from $14. The bank also cut their 6 and 12-month outlook to $12.50 from prior estimates of $13. The short term logistical issues seemed to add a bit of speculative buying support midday but the better than expected stocks report on Thursday limited gains to the upside."

FKLI- Mild Retracement, Nothing Major Yet


Index futures is coming down for retracement after it rose to 7 weeks high last week. Bulls have to take some breather after rallying for more than three sessions straight to reach 1,679 previously. Stock index is still able to hold its ground above 1,660 level this week but likely sharing the same scenario with index futures for the moment. Technically, medium term perspective for the April contract remain Bullish. On short term, market is likely retracing slightly from the high from its overbought reading beginning last Thursday. In other words, nothing goes up forever and some retracements or corrections are common sight for any uptrending market.Volatility will remain high as we are expecting major announcement from government officials on parliament dissolution, perhaps one or two weeks from today. For today, pivot support for the April contract is located around 1,655 while resistance is pegged at 1,669.

Daily Pivot Point
R2= 1674
R1= 1669
S1= 1655
S2= 1646

FCPO- Double Bottom ? Don't Bet On It. 

I would be a fool if I put most of the "eggs" in this basket, hoping the market will rally after from a possible double bottom candle pattern. It is not that I am pessimistic about this candle formation, maybe I experience many double bottom that only lasted for some sessions. Anyway, it is a very potent candle formation that able to bring handsome gains when the price does rallied more than 2% from previous bottom / support level. Example, previous double bottom that brought the benchmark month from 2,358 on March 14th to 2,503 on March 22nd. That was about 145 points or 6% gains if anyone does re-act to this candle formation. For this particular case, we might be looking at another major candle formation and guess what, it will be another double bottom occur on daily chart if the benchmark Jun manage to rally more than 2% from 2,336 level. The downside trading with candle formation you would not know how much gain that pattern could brought and even after certain criteria such as using some indicators to filter the reliability of the pattern or certain % on price movement, candle formation is still susceptible to fail. The upside on trading candle formation or pattern will be the significant gain it bring, especially on higher time frame such as daily chart. All bets are off on this double bottom pattern if the benchmark Jun continue to drop below its 9 weeks low at 2,330 level. Externally, demand will be the spotlight for the market to move at the moment. Demand or export has to rise more than enough to support market rally, else it  is likely dampen chances for the market to recover. For today, pivot support is located around 2,305 while resistance is pegged at 2,365.


Daily Pivot Point
R2= 2395
R1= 2365
S1= 2320
S2= 2305

 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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