FCPO: Challenging Path Ahead Of This Recovery 9th Sept 2014

Tuesday, 9th Sept 2014. Palm oil recovery has taken its toll by less aggressive Buyers so far, retracing most of the after hitting new high. Other news to follow.

"- U.S. stocks ended lower on Monday as investors turned cautious after five straight weeks of gains that sent the main benchmarks to record highs. A few M&A deals were grabbing attention Monday. On the economic news front, data showed consumer credit rose a record amount in July. The S&P 500 SPX, -0.31%  lost 6.2 points, or 0.3%, to end at 2001.54, with the energy sector leading the losses. The Dow Jones Industrial Average DJIA, -0.15% dropped 25.9 points, or 0.2%, to 17,111.42. The Nasdaq Composite COMP, +0.20% defied the general trend and finished the session 9.4 points, or 0.2%, higher at 4,592.29."

"-Hong Kong stocks on Monday edged lower, as China’s imports for August fell unexpectedly, while exports slightly exceeded expectations. Official data showed Monday that China’s imports dropped by 2.4% on-year last month, against an estimated 2.7% rise from a poll of economists by The Wall Street Journal. Meanwhile, exports grew 9.4% year-over-over, above a forecast 9.2% increase by the economists. The Hang Seng Index HSI, -0.20%  ended down 0.2%, with its top components — HSBC Holdings PLC 0005, -0.78% and Tencent Holdings Ltd. 0700, -1.71% — as a drag. HSBC was off 0.8%, and Tencent declined 1.6%. In Japan, the Nikkei Average NIK, +0.46%  edged up 0.2%, while the yenUSDJPY, +0.01%  slightly dropped versus the dollar to ¥105.134 from ¥105.100 in the previous session. The broader Topix index I0000, +0.36%  rose 0.4%. In other Asian markets, Australia’s S&P/ASX 200 XJO, +0.16%  fell 0.4%, with the Australian dollar AUDUSD, -0.05%  a little weaker at 93.56 U.S. cents, down from 93.78 U.S. cents in the prior session."

"- Gold prices rolled over to close lower Monday giving up earlier gains as headline risk from global conflicts eased. Gold for December delivery GCZ4, +0.32%  closed at $1,254.30 an ounce, down 1% from $1,267.30 on Friday. December silver SIZ4, +0.71%  fell 20 cents, or 1%, to settle at $18.96 an ounce."

"-CPO Futures end Higher

KUALA LUMPUR: Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives closed higher yesterday with a firm bias due to the weakening of the ringgit against the US dollar. Both February 2014 and March 2014 was RM29 higher at RM2,586 and RM2,594 a tonne, respectively, April 2014, May 2014 and June 2014 edged up RM27 to RM2,602, RM2,602 and RM2,600 a tonne, respectively, while July 2014 added RM26 to RM2,591.  Turnover dwindled to 24,668 lots from Wednesday's 32,845 lots while open interest advanced to 192,541 contracts from 190,944 contracts. On the physical market, February South increased RM30 to RM2,590 a tonne."

FCPO- No Smooth Sailing To The North

No such thing as easy uptrend or smooth uptrend, the Bulls always faced tough time after it got beaten by Bears for the past three months. Bulls need more than good news to regain their confidence to charge north. For the moment, palm oil futures rallies is not impressive at all. Futures prices manage to recover and breach important resistance level around 2,052 but did not finish well since past Friday. All we can see here, the Bulls are still hesitate to commit Buying at higher level. Once Buyers reach certain high, they will dump or take their profit out of the market. With most traders are staying low and staying cautious on this pending rally, we should too. On the technical side, the benchmark Nov have breached above two important resistance level, which is previous Thursday high around 2,034 and one-week high at 2,052. Unfortunately, market is not convince that breaching these two resistance levels are sufficient enough to bring back more Bulls, and futures prices quickly erase these gain later on the afternoon session. The road to recovery is tough for the moment as Nov need to went up above 2,070 for the next rally to sustain, but this feat is not expected for the time being. On the external side, palm oil fundamental remain weak, export were still negative, stock and productions are still climbing, and we still looking at favorable weather for palm oil trees. Not good at all but these are the information we have, final judgement rest on you, or the trader themselves.

Daily Pivot Point
R2= 2086
R1= 2064
S1= 2023
S2= 2004

 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.