Technically speaking 📈
August 21st, 2019
⏰ 1 minute read
⏰ 1 minute read
Last month
While it’s been a tricky time for most financial markets in July & August... one standout is palm oil. After well over a year of falling, the spot price has rebounded very strongly in July & August. While it’s taking a short pause now is a great time to have a look at what’s happening to the price, technically.
Daily
One way to look at technicals of a market traded price is using moving averages. You can choose any number, but popular ones are 20 & 50 & that’s what we look at here. In $ terms palm oil has been in a range $475 to $700 for years now. The daily chart was close to the bottom of the range & has now broken above the moving averages towards the mid $585 level.
Weekly
The daily chart looks still strong, moving averages rising & after a big move is just having a short pause, Time is a big factor in markets & weekly is more senior than daily. The weekly chart fell from the mid range a year ago to the lows. The moving averages are still falling, but the price has moved above & the averages will now start to rise, building positive sentiment. The weekly trend has changed to up.
Monthly
While the weekly & daily affect market sentiment in the shorter & very short term, eventually sentiment returns to the longer term trend, the monthly. Over the last 3 years, we can see the range & the monthly averages are rising! While the last 1 year prices fell to test these averages, it held above them. We are now returning to this positive long term trend & should head above the mid $585 level next.
Up
After a difficult period, the market is now recovering quickly & sentiment will soon shift back to the rising long term trend & the upper half of the range. Crucially for us, above the middle $585 is exactly matching with the prices which would, together with a similar rise in production, give us a return to net profit. Follow our daily progress here.
While it’s been a tricky time for most financial markets in July & August... one standout is palm oil. After well over a year of falling, the spot price has rebounded very strongly in July & August. While it’s taking a short pause now is a great time to have a look at what’s happening to the price, technically.
Daily
One way to look at technicals of a market traded price is using moving averages. You can choose any number, but popular ones are 20 & 50 & that’s what we look at here. In $ terms palm oil has been in a range $475 to $700 for years now. The daily chart was close to the bottom of the range & has now broken above the moving averages towards the mid $585 level.
Weekly
The daily chart looks still strong, moving averages rising & after a big move is just having a short pause, Time is a big factor in markets & weekly is more senior than daily. The weekly chart fell from the mid range a year ago to the lows. The moving averages are still falling, but the price has moved above & the averages will now start to rise, building positive sentiment. The weekly trend has changed to up.
Monthly
While the weekly & daily affect market sentiment in the shorter & very short term, eventually sentiment returns to the longer term trend, the monthly. Over the last 3 years, we can see the range & the monthly averages are rising! While the last 1 year prices fell to test these averages, it held above them. We are now returning to this positive long term trend & should head above the mid $585 level next.
Up
After a difficult period, the market is now recovering quickly & sentiment will soon shift back to the rising long term trend & the upper half of the range. Crucially for us, above the middle $585 is exactly matching with the prices which would, together with a similar rise in production, give us a return to net profit. Follow our daily progress here.