Tuesday, May 27, 2014

FCPO: Hits The Major Support Level And Rebound 27th May 2014

Tuesday, 27th May 2014. The benchmark August manage to rebound right after it hit slightly below major support level around 2,487 area yesterday. Other news to follow.

"- After nearly six months of jockeying, all three major U.S. stock indexes are showing gains for the year at the same time. On Friday, the Dow Jones Industrial Average DJIA +0.38% showed a gain of 0.2% for the year, while the Nasdaq Composite Index COMP +0.76% was also up 0.2%, and the S&P 500 Index SPX +0.42% finished up 2.8% for the year to date. "

"- Asian stocks settled mostly higher on Monday, with Japan climbing to its highest level in seven weeks on a softer yen. Japan’s Nikkei Average JP:NIK +0.73%   gained for a third straight day, up 1% to close at its highest level since early April. The broader Topix index JP:I0000 +0.68%   ended up 1.2%. Meanwhile, the Japanese yen USDJPY -0.01%   weakened to ¥101.916 from ¥101.971 in the prior session. Australia’s S&P/ASX 200 AU:XJO +0.07%  also finished 0.4% higher, and the AussieAUDUSD +0.22%   held firm against the dollar, rising to 92.45 U.S. cents from 92.31 U.S. cents in the previous session."

"- The dollar rose Friday, notching weekly gains against the euro, yen and Australian dollar.Housing data have become significant because of comments from Federal Reserve officials, including Fed Chairwoman Janet Yellen, about the sector’s recent weakness. Investors are closely watching economic data and language from the Fed for clues on when the central bank could begin to raise interest rates, which should boost the dollar."

FCPO- Temporary Rebound

Do not get too excited as the benchmark August bounced up from major support level yesterday, we are yet out of the woods. The benchmark August was expected to recover slightly once it approach 2,487 level but it did dropped slightly to 2,483 level before recovering on late afternoon session. In long term, palm oil futures is still taking Bearish cue from slowing growth of export figures, that would not help much with growing inventories and steady production so far. With these external factor in mind, palm oil futures can become volatile once this temporary recover is over. It is not a science that the benchmark August "must" rebound once it hit that support level, but it is the matter of how "significant" was the support /resistance level at that time. If that certain support / resistance level required a long time to formed plus the pivot area manage to hold its line even after numerous attempt to break it, then it will become a significant support/resistance level. But even this significant support/resistance does not last forever, it can be broken and once it has been broken, serious force is likely followed right after that break out. Right now, we are looking at temporary rebound on the palm oil futures right after the benchmark August recovered to closed at 2,508 yesterday, nothing more. We should be expecting the market to recover more for today and the following day as Buyers manage to overcome Selling force around yesterday closing session. In other words, the benchmark August manage to closed with a Bullish hammer candle displayed by the daily candle chart shown above. For today, the first resistance level is pegged around 2,538 while support is located around 2,483~2,480 level.

Daily Pivot Point
R2= 2531
R1= 2519
S1= 2489
S2= 2471
 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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