Tuesday, March 25, 2014

FCPO: Steep Retracement / Pullback 25th March 2014

Tuesday, 25th March 2014. Palm oil futures went down for another session yesterday down below 2,700 psychological support due to sluggish expectation on export data. Other news to follow.

"- U.S. stocks bounced off session lows but still finished Monday lower as selloff in biotechnology companies weighed on indexes on a day light on economic news. Losses followed a drop in prices on Friday, which dented last week’s gains. The Nasdaq Composite COMP -1.18%  finished the day 50.40 points, or 1.2%, lower at 4,226.39, paring some of the heavy losses at session lows. Biotech and internet stocks were the biggest losers on the tech-heavy index. The S&P 500 index SPX -0.49%  ended the day 9.08 points, or 0.5%, lower at 1,857.44. The benchmark index bounced after nearing a key support level of 1,850. The Dow Jones Industrial Average DJIA -0.16%  shed 26.08 points, or 0.2%, to 16,276.69."

"-Asian stock markets were mostly higher Monday, shrugging off weak Chinese economic data.As of the midday break at 0230 GMT in Tokyo, the Nikkei Stock Average was 1.8% higher as traders searched for bargains after steep selling last week pushed the index to a six-week low. In Korea, the Kospi was up 0.3%, while Shanghai added 0.4%, Hong Kong’s Heng Seng index was up 1.1%, and Singapore rose 0.9%. Both the Australian ASX200 and the NZX50 were down 0.2%, while India’s Sensex was flat."
"-Oil prices logged a minor gain on Monday as an oil spill caused the closure of one of the busiest seaports in the United States. Traders also continued to weigh the prospects for global crude-supply disruptions linked to Russia-Ukraine tensions, providing further support for oil prices, but weak economic data from China kept a cap on any gains. Crude for May delivery CLK4 -0.31%  rose 14 cents, or 0.1%, to settle at $99.60 a barrel on the New York Mercantile Exchange. Oil’s European benchmark, Brent crude, gave up earlier gains, with the May contract slipping by 11 cents, or 0.1%, to $106.81a barrel on the ICE Futures exchange."

FCPO- Psychological Support Does Not Hold Well.

Sluggish price movement was the main headlines on palm oil futures price action yesterday. The market got spooked significantly by the weaker export figures expectation that should be released on afternoon session today. No one would know how low any retracement could take you to but it could range from 8% to 12% at least before it is ready to resume its preceding uptrend. Now, yesterday retracement done was about 7.4%, and that leave us that are still plenty of room for the market to go down for the moment. The benchmark June looks like forming another higher low on last Wednesday when it rebounded up to 2,876 but the rally seems faded when it fall back to previous low at 2,729 level. Yesterday, the downside risk was amplify when it breached below 2,729 level for the first time. Any price action that went down below previous low was not a good indication to go Long. The benchmark June does tumble after breaking below 2,729 and headed straight to 2,697 level, marking a negative closing day. The technical hint we have now would be further weakness for the palm oil futures as it has create a lower high and lower low judging on its daily chart. Only time can tell how low and how long this correction would end. Traders are recommend to pay attention at resistance level for safer Short position. On external side, upcoming dry season might cushion palm oil price from plunging amid production would not climb that rapid. Conclusively, for Long traders you are in for a rough ride. Today, pivot support for June contract is located around 2,678 followed by 2,658 while resistance is pegged at 2,737.

Daily Pivot Point
R2= 2776
S1= 2678
S2= 2658
 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.