CPO PRICE ANALYSIS AND OUTLOOK FOR 2H JULY 2013 Presented by: Benny Lee, Private trader/ Chief Market Strategist

Transcription

1 CPO PRICE ANALYSIS AND OUTLOOK FOR 2H JULY 2013 Presented by: Benny Lee, Private trader/ Chief Market Strategist

2 CONTENTS: 1. Technical analysis of crude palm oil Trend Analysis short term 1 Chart pattern analysis 4 Trend Pattern Analysis 7 Support and Resistance analysis 9 Cycle Pattern analysis 13 Technical analysis summary Factors affecting price of FCPO Output/Export/Stock 16 Analysis FCPO price forecast for the year 22 Disclaimer Copyright 2013 Benny Lee. The author will not be responsible for any losses or loss profits resulting from investment decisions based in the use of the information contained in this printed material, or otherwise. This course / printed material is intended to provide accurate and authoritative information with regard to the subject matter covered. It is taught or distributed with the understanding that the author is NOT engaged in rendering any investment or other professional advice. If investment or other professional advice is required, the services of a competent professional person should be sought.

3 Trend Analysis FCPO - Daily 1. Price in a down trend since May 2012 Price near long term 200-day average 30-day moving average 60-day moving average 90-day moving average 200-day moving average 2. Consolidation since October 2012 Data source: Bursa Malaysia 1

4 Trend Analysis FCPO - Daily Sideways trend and support and resistance levels resistance RM2,550 support RM2,220 Data source: Bursa Malaysia 2

5 Trend Analysis from previous pages: 1. Since May 2012, Price went into a long term down trend. 2. Price is currently near the long term 200-day moving average at RM2, Short term trend is bullish and momentum is good. 4. Price moves sideways between RM 2,220 and RM2,600 sine October Support level is at RM2,220 while resistance level is at RM2,550. 3

6 Chart Pattern Analysis 0 FCPO - Weekly B A ELLIOT WAVES S ZIG-ZAG correction: 0A = BC C = RM2,320 Data source: Bursa Malaysia 4

7 Chart Pattern Analysis FCPO - Daily ELLIOT WAVES S SIDEWAYS CORRECTION ABCDE PATTERN a c e b d Data source: Bursa Malaysia 5

8 Chart Pattern Analysis from previous pages: 1. FCPO went into a major price consolidation since 2011 after a strong bullish rally when price reached RM4, An Elliott Wave correction wave (the ABC wave) points a target of RM2,320. This may be the bottom of FCPO price. 3. Price developed a sideways correction trend. Based on Elliot wave principle, the current short term up trend is the last leg of the sideways correction (with a cap at RM2,550) and we may be expecting a new trend to form soon. 6

9 Trend Pattern Analysis FCPO - Monthly Average RM2,900 RM2,200 RM2,250 Source: NextVIEW Sdn Bhd 7

10 Trend Pattern Analysis: year linear regression line (average) is currently at RM2, Linear regression channel is between RM2,200 and RM4, Price is currently near the bottom band of the linear regression channel 4. At current price at RM2,474, price is still considered oversold 8

11 Support and Resistance Analysis: SUPPORT FCPO - Daily B Fib 2010 support level A Data source: Bursa Malaysia 9

12 Support and Resistance Analysis: SUPPORT 1. Support level based on a 61.8% Fibonacci retracement from the October 2008 (Point A) to February 2011 up trend at RM2,330 (Point B). 2. RM2,330 is also the support level on July Down trend channel support level is at RM2,200 - RM2, Support level is between RM2,200 and RM2,300 10

13 Support and Resistance Analysis: Resistance FCPO - Weekly A B 2 1 O Source: NextVIEW Sdn Bhd 11

14 Support and Resistance Analysis: RESISTANCE LEVEL 1. Fibonacci retracement levels from 2011 and from 2012 are used. 2. Strong resistance at RM2, First confluence of retracement levels at RM2, Second confluence of retracement levels at RM3, Down trend line at RM3,300 12

15 Cycle Pattern analysis: Data source: Bursa Malaysia 13

16 Cycle Pattern analysis: 1. The pattern from the end 2008 to-date is similar to the pattern between year 2001 and Time period is also the same 3. If history repeats itself, we are going to see a long period of sideway correction. 4. Based on the time frame, we have about 7-8 months of correction. End of the correction period is Jan Feb

17 Technical Analysis Summary 1. Chart patterns and support analysis show that price have bottomed out at RM2,300 to RM2, There is resistance levels at RM2,550 (Immediate) and RM2, Price trend shows that there is a reversal in price trend from bearish to bullish but weak as it struggled to break above RM2, However, the cycle pattern analysis shows that market is still due to trade sideways in the next 7-8 months. 5. From (4) and (5), we are going to expect a sideway market till the end of the year between RM2,250 and RM2, Price may climb towards RM2,900 end of the year to early next year. 15

18 2. Factors affecting price of FCPO FCPO Output (Monthly) Data source: MPOB 16

19 2. Factors affecting price of FCPO FCPO Export (Monthly) Data source: MPOB 17

20 2. Factors affecting price of FCPO FCPO Month-end Stock (Monthly) Data source: MPOB 18

21 Analysis 1. Palm oil output expected to increase to 1.6 to 1.8 million tons in June to August 2. Palm oil export expected to increase to 1.6 million tons to 1.7 million tons in June to August 3. Month end Stocks to decline to 1.7 in June and increase to 1.8 to 2.0 million tons in July to August 19

22 2. Factors affecting price of FCPO FCPO, Stock, Output and Export chart - Monthly Stock FCPO Export Output Data source: MPOB 20

23 Price vs Inventory 1. Whenever output line crosses above the export line, stocks increase, price declines. This normally happens in the 2 nd and 3 rd quarter. 2. Output expect to cross above the export line in July. 3. Price may continue being pressured in the next two quarters 21

24 3. Crude Palm Oil forecast for the year FORECAST Price of FCPO expected to range bound between RM2,300 and RM2,600 at least until near year end. In the short term, expect price to trade around RM2,450 and RM2,550 in the next 1 2 months and pullback to RM2,300 levels before starting its bullish rally in the last quarter. Expect price to end at RM2,900 at year end. Average price this year expected to be RM2,600 Validity As long as price stays above RM2,250 22

25 THANK YOU!