Palm Oil Is Seen Rallying on Moving Average: Technical Analysis

Palm oil, the world’s most-consumed cooking oil, is poised to advance as much as 5.2 percent in the next two weeks, according to technical analysis by Commtrendz Risk Management Services Pvt.

The moving average convergence-divergence indicator shows the beginning of an uptrend “and it can now become bullish,” said Gnanasekar Thiagarajan, a director at Mumbai-based Commtrendz. The tropical oil may climb to as much as 2,485 ringgit ($785) a metric ton on the Bursa Malaysia Derivatives, he said. That would be highest level since Aug. 28.

The MACD indicator is a gauge of momentum derived by subtracting the 26-day exponential moving average from the 12-day average. A second measure, called the signal line, uses the nine-day moving average of the MACD indicator.

“Only an unexpected decline below 2,305 ringgit a ton could cause doubts on our bullish view and turn the picture weak again, which is not our favored view,” Thiagarajan said by phone. In technical analysis, analysts and investors use charts of trading patterns and prices to try to predict changes in a security, commodity, currency or index.

Palm oil, down 3.1 percent this year, is heading for a third annual loss, the worst run since at least 1996. The contract for delivery in December dropped 0.8 percent to 2,362 ringgit a ton in Kuala Lumpur on Oct. 14.

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