Thursday, February 6, 2014

FCPO: Holding Up With Other Edible Oil Factor In

Thursday, 6th Feb 2014. Palm oil futures has been holding up well above 2,500 level after resuming for trading this week. The next question would be "how long." Other news to follow.

"-U.S. stocks ended Wednesday’s choppy session lower as investors were unable to shrug off worries over the economy. A weaker-than-expected ADP jobs report and the ISM report on the services side of the economy compounded fears that the U.S. recovery is still vulnerable, weighing on sentiment. A widespread notion that markets may have further to fall also kept indexes from building on the previous day’s modest gains. Philadelphia Fed President Charles Plosser’s comments urging to speed up the tapering reminded investors that quantitative easing is unlikely to come to aid the markets in 2014. The S&P 500 SPX -0.20%  closed down 3.56 points, or 0.2% at 1,751.64 and is 5.2% below its peak reached on Jan 15. The Dow Jones Industrial Average DJIA -0.03% , which dropped more than 100 points at session lows, closed 5 points lower at 15,440.29. The Nasdaq Composite COMP -0.50%  ended the day 19.97 points, or 0.5%, lower at 4,011.55."

"- Hong Kong stocks bounced back on Wednesday after the previous day's heavy losses, with the Hang Seng Index HK:HSI +0.24% up 0.6% at 21,534.96."

"-Palm oil gained on speculation that demand for the tropical oil used in food to fuels may improve as dry weather hurt soybean output prospects in South America. In Brazil’s southern state of Parana, 88 percent of the soybean crop was in good condition as of Feb. 3 compared with 94 percent week ago, the Deral crop-research agency said on its website. The harvest is 9 percent complete, it said. Soybeans rallied as much as 0.5 percent to $13.20 a bushel on the Chicago Board of Trade, the highest price since Jan. 16. The most-active contract gained for a fifth day in the longest winning run since the period to Jan. 15. Soybean oil climbed 0.6 percent to 37.93 cents a pound."

FCPO- Ranging Price Action

Sure, the Soy bean and soy oil went up overnight due to dry weather concern, but would it give the same effect to palm oil ? Most likely yes, especially on the opening bell. A positive closed on overnight Soy oil is likely spur palm oil futures to open higher, that if other fundamental factor does not changes much overnight as well. Even though the palm oil futures is likely opening higher soon, the first hurdle for further upside is pegged at 2,570 level for the moment. If this resistance level is taken out, we are likely to expect more choppy session heading upwards. Yes, you heard me right, choppy session towards the upside, especially if you are trading on intraday session. No more straight up direction these days, market will retrace, whack your Stop Loss for your Long position and then go up again later. It is always a tough day for intraday trader and it does not make it any easier for medium term to long term trader as well. Fake break out that force those longer term traders to Stop their position and then the price move back into their direction, it is frustrating process and there is still no sign of promising trend for almost three months. Overall, the benchmark April is still stuck within previous Monday Bearish candle that is still engulf yesterday recovery. In short, we are still trapped within a Bearish note unless the benchmark April manage to spike above 2,570 level.

Daily Pivot Point
R2= 2563
R1= 2553
S1= 2533
S2= 2523
 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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