Exactly as we had forecast, Shanghai rubber futures rallied to 19,500 yuan per tonne by year-end. They then retreated to the 50-day moving average which supported the market exceptionally well, especially considering that observed volatility is two standard deviations above the very long-term mean. The 16,500 level can now be seen as a new interim low and we’re on the march again, the market hitting its highest levels since April 2013. Overbought on the RSI, as it was when we last wrote about it in November, underlines how oscillators are probably best avoided in strongly trending markets. With bullish momentum the strongest in years, next step should be a rally to 22,000.

Nicole Elliott is a technical analyst