2012-03-18

After the first leg of the fall, ie. from Rs766.9 to 674, NCDEX refined soy oil formed a pullback. The wave structure shows that it was a complex corrective structure. In terms of Fibonacci retracement the pullback retraced nearly 78.6% of the fall. The agri commodity is now set for the next leg down. The daily momentum indicator is also showing a negative divergence. Unless the key Fibonacci retracement (Rs748) is crossed on a closing basis the targets on the downside are Rs674 (the low) and Rs654 (the equality target).

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Crude palm oil had taken support at the rising trendline. Since then it has been riding the up trend. However recently it has formed an ending diagonal and has broken on the downside. This indicates that the rally has matured atleast from short-term perspective. The daily momentum indicator has given a fresh sell signal. At this level risk-reward ratio is also extremely favorable for bears. Hence one can short the commodity with reversal above Rs572.4 on a closing basis. The targets would be Rs555 and Rs541.
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Jeera has been in a downtrend. It has broken the rising trendline decisively. Thus it has broken down from the wedge pattern. It has fallen towards the weekly lower Bollinger Band, which is expanding, indicating that further fall is likely. The weekly momentum indicator is in sync with the bearish breakout. However the daily momentum indicator is showing a positive divergence. Thus a short term bounce is possible, which should be used as a selling opportunity. The channel target on the downside is Rs10,250. Reversal can be trailed to the 20-weekly moving average (Rs14,300).

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