Palm oil futures are “oversold” in the short-term and may rebound to 2,800 ringgit ($904) a metric ton by the middle of the year, according to Benny Lee, chief market strategist at Jupiter Securities Sdn.
Chart patterns and support analysis show prices “have bottomed out at 2,300 ringgit to 2,400 ringgit” and “there is a reversal in price trend from bearish to bullish,” he said in a presentation as part of a web seminar organized by Malaysian Palm Oil Council.
Futures rose 3 percent this year to trade at 2,510 ringgit on the Malaysia Derivatives Exchange on optimism that duty-free exports in the first two months of the year may reduce stockpiles that totaled 2.58 million tons in Malaysia in January, near the record 2.63 million tons a month earlier.
Failure to break immediate resistance at 2,600 ringgit in the next two months would show “weak bullish momentum” and the price may continue to stay between 2,200 ringgit and 2,600 ringgit this year, he said.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
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