Tuesday, April 22, 2014

FCPO: First Sign Of Recovery, Higher Low 22nd April 2014.

Tuesday, 22nd April 2014. Palm oil for July contract rose slightly to close at day high, after falling down to 2,612 level on yesterday afternoon session. With more and more Bearish news on palm oil export, the road to long term recovery would not be smooth. Other news to follow.

"- U.S. stocks closed modestly higher Monday, helping the S&P 500 to extend its winning streak to the longest in six months. Estimate-beating results from a number of companies on Monday boosted sentiment amid thin volumes on Wall Street. More than 4.8 billion stocks changed hands across Nasdaq and NYSE exchanges, the lowest number this year, according to FactSet. The S&P 500 SPX +0.38%  ended the day 7.04 points, or 0.4%, higher at 1,871.89, rising for five straight sessions, its longest streak since October. The Dow Jones Industrial AverageDJIA +0.25%  closed 40.71 points, or 0.3%, higher at 16,449.25. The Nasdaq Composite COMP +0.64% added 26.03 points, or 0.6%, to 4,121.55, also rising for the fifth straight session."

"-Asian shares were mixed Monday, with stocks in Tokyo rising again after a harsh selloff two weeks ago, as investors focus on upcoming earnings reports and U.S. President Barack Obama’s visit to the region at a time of rising tensions. The Nikkei Stock Average was up 0.8%, after gaining 4.0% last week. Taiwan shares were 0.1% lower and South Korea’s KOSPI was down 0.3%, while the Philippines’ benchmark was up 1.2%. Some investors are hoping for progress in Trans-Pacific Partnership trade talks this week as Mr. Obama visits the region. That would be good for Japanese Prime Minister Shinzo Abe, who faces rising worries about the sustainability of Japan’s economic revival."

"- Oil prices edged higher on Monday to log their highest close in seven weeks as continued uncertainty in Ukraine and U.S. economic reports that generally support a brighter outlook for energy demand lifted prices for a third-straight session. Crude for May delivery CLK4 -0.14% tacked on 7 cents, or 0.1%, to settle at $104.37 a barrel on the New York Mercantile Exchange, with prices briefly spending time in negative territory shortly ahead of the Nymex close. The settlement was the highest since March 3, according to FactSet data tracking the most-active contracts."

FCPO- A Small Hint For Recovery

Palm oil futures is showing sign of further recovery judging on yesterday closing value. Despite recent bad news on export figures, the benchmark July manage to recover and closed at the day high. Market might be oversold from previous session when July contract starting to go downhill once it break out from 2,670 two weeks resistance level. The retracement was swift and taken the price dipped from 2,700 to 2,612 level, probably expecting bad export data for the past one week. Now the export data has been announce and it should give some idea how oversold the market was. I may sound negative on current palm oil sentiment but losing demand was the first sign for the price to fall further, as inventory would not reduce with the pace we all expected. On the other view, the benchmark July has formed a higher low when the price recovered to 2,645 yesterday. Now, we can identify a new immediate support based on previous yesterday low, which is 2,612 area. This support number is not a science that price should rebound if it retrace back again, but rather serve as last defence line for this uptrend to survive. If the benchmark July would break below this level, we are likely looking at more Bearish outlook for this week. The game plan for now will be trusting this higher low (serve as a sign for further recovery) and go Long if the market did go above yesterday high at 2,645 level and take about ten to fifteen points profit for intraday setup. For stop loss, you might want to risk only eight to ten points (maximum) from your Long entry. Today, pivot support is located around 2,619 while resistance is pegged at 2,665.

Daily Pivot Point
R2= 2665
R1= 2652
S1= 2619
S2= 2599
 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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