Chart of the day: Positive for palm oil
We looked at soy beans at the start of this month, noting they were on the move. Dalian palm oil futures are also on the up, if anything leading a little, with Friday’s strong close well above horizontal and Fibonacci resistance at 6,350 yuan a big plus. Trend-line support is moving smartly higher, as is the rapidly thickening Ichimoku cloud, both of which should help increase momentum (which is already bullish). Based on the current wave structure we would expect a strong rally to 7,750 yuan per tonne. Thin markets over the year-end might cause some gapping, an increase in observed volatility, and potentially a sharp squeeze – which might also affect other edible oils.
Nicole Elliott is a technical analyst