fis technical - grains 13-3-17 - freight investor services · upside moves from here should meet...
TRANSCRIPT
The information provided in this communication is general in nature only and does not constitute advice in relation to investment products nor
constitute any recommendation on our part. The information has been prepared without taking into account your investment objectives, financial
situation or knowledge and experience. Freight Investor Services Limited is authorised and regulated by the Financial Conduct Authority (FRN
211452).’
Technical Report Global Leader Dry Bulk Derivatives
Grains And Ferts
Highlights:
• SOY – Bullish divergence on the daily
chart and oversold momentum on the
weekly suggest support levels should
hold around these levels.
• Corn – resistance levels rejected, bearish
engulfing candle points to a weakening
technical. Caution on a close above US$
359 ½ on the daily chart as this could
have bullish implications going forward.
• Wheat – A weakening technical is now
on support, upside moves should be met
with selling resistance.
• NOLA – Closed at US$ 218, the
momentum pullback would suggest
buyers should be cautious on upward
moves.
• UAN – Range bound, one to avoid at this
point from a technical perspective
Technical Analyst
Edward Hutton
44 20 7090 1120
Client Relations
Andrew Cullen
44 20 7090 1120
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Soy March 2017 Weekly
Support – 992, 972, 938
Resistance – 1014, 1,031, 1,057
Last weeks close was below the 50 period MA, and this
could be significant going forward as it has been a key
support since April 2016.
Technically we are below key averages, but continue to
hold above the support at US$ 992 ¾ which represents
the base of the M formation mentioned last week. Until
broken we remain in a higher high higher low formation
and the market should be considered as being in bullish
(rather than neutral to bearish) territory.
Oversold momentum in the form of the stochastic would
suggest that the weekly chart is not yet ready to break
out to the downside and should find support at these
levels.
We continue to see a weakening technical, however
until we see a downside breakout this market is not yet
confirmed as bearish.
Source Bloomberg
Soy March 2017 Daily
Support – 992, 981, 965
Resistance- 1.008, 1,017, 1,025
Lower highs and lower lows indicate a weakening trend and
we are now testing key support levels around the US$ 992
¾.
We highlighted last week that the high on the 28/2 would
suggest that we could be witnessing a corrective phase
rather than a bear play. This continues to be the case.
Momentum at 10 is now looking oversold and showing a
bullish divergence. Being on a support level with the
divergence would suggest that support should hold in the
near term.
The daily technical appears more bullish than the weekly at
this point. Oversold momentum in the weekly and daily
would suggest support levels should hold in the near term
and look to test the weekly pivot resistance at US$ 1,008.
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Corn March 2017 Weekly
Support – 349, 342, 325
Resistance – 363, 370, 384
The resistance zone has held in the weekly corn futures,
with last week’s candle producing a bearish engulfing
which would suggest lower pricing in the longer term from
these levels.,
A reduction in open interest would indicate that longs
have been exiting the market for a few weeks now, and
this supports the bearish candle pattern. This is also
confirmed by continued lower momentum, with the
stochastic at 41, having crossed below the bullish support
line at 50.
The technical picture is weakening on the weekly chart
having made a series of higher lows and higher highs, we
remain in bullish territory in terms of recent price action
above US$ 355 ¾ on the weekly chart. A close below this
level on the weekly chart means price action will go from
bullish to neutral in the near term play. However the
overall trend has a bearish bias as it remains below key
longer term averages.
Source Bloomberg
Corn March 2017 Daily
Support – 9,030, 8,935., 8,650, 8,100 Resistance- 360,363,370
Support- 355, 352, 349
Last week’s assessment that the upward move was not
being supported by volume suggesting that longs were
looking to exit the market. This has proved to be correct
and has resulted in a downward move.
Lower highs and lower lows would imply that the bullish
technical is either over, or in a corrective phase. Market
shorts need to be cautious on a close above US$ 359 ½ as
this would suggest that we are in a corrective phase
rather than at the begging of a bear reversal. Oversold
momentum should be a cause for caution at these levels.
The technical is weakening, oversold momentum does
not mean the market is a buy, it is just a warning of
potential basing in price. US$ 359 ½ is the key resistance,
above here shorts should be looking to tighten risk.
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Wheat March Weekly
Resistance – 435, 444, 447
Support- 418, 411, 392
The Daily technical failed to test the 200 period MA, it
did however fail at the 200 period MA low average,
highlighting the weakness in the market.
Daily momentum (stochastic) is starting to look
oversold at 28, as we approach the US$ 418 support
level. If we hold here we could see a short term swing
to the upside as swing traders look to take advantage
of the oversold conditions. Technical resistance can be
found between US$ 435 and US$ 447.
A close below US$ 418 would be considered as
technically bearish going forward.
Rejection of the resistance on the weekly chart and
lower highs on the daily chart point to a weakening
technical in the long term. Upside moves from here
should meet technical selling pressure as shorts look to
increase their positions.
Resistance- 441, 447, 464
Support- 412, 410, 388
We noted last week that upside price rejection was
leading us into a weaker technical and that longs should
tighten risk. This has been the case.
An increase in open interest on the downward moves
would suggest that the market is positioning itself from
the sell side supporting the rejection of the upside
resistance levels. We are also seeing momentum crossing
from bull to bear and it is now below the 50 line.
Technical support can be found at US$ 412, a close below
this level would have bearish implication going forward.
Resistance can be found between US$ 441 and US$
464. Market longs would need to see a close above the
last resistance before looking to enter on anything less
than a swing basis at this point.
Wheat March Daily
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
US Gulf Nola Urea Granular Spot Price Weekly
Resistance – 232, 234, 265
Support- 218, 213, 206
The Nola Urea index is now in balance, in a sense it is
at fair value. The 218 close last week puts it on our
main support level.
Momentum is oversold at these levels, and this could
be a sign of a further upward push. However the
momentum pullback is greater than the recent price
pullback, suggesting that any upward moves from here
could/should stall at the technical resistance levels
mentioned, as fresh sellers look to take advantage of
any upward swing.
Technically oversold and on support, the stochastic
would suggest that any upward moves from here could
be creating a bull trap. Longs should stick to a swing
basis only until they see a strengthening technical.
UAN Q2
Resistance – 187.25
Support- 182
Little to say on the UAN Q2 contract other than it
remains in range,
We are now the range support and momentum is
bearish on the daily chart. However we need to see
a close below US$ 182.50 (preferably US$ 182) to
confirm a downside breakout. We remain neutral on
this until a directional breakout.
Technical buy level at US$ 187.25 and sell level
below US$ 182.
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Technical Analysis Glossary
Pivot Point
A point where the market makes a new high or low, before reversing in direction.
Trend Line
A directional line connecting pivot points.
Primary Trend
The main trend line over an extended period of time.
Secondary Trend
Distinct from but within the primary trend. Indicates recent trend.
Support
A previous market low where market participants have been prepared to enter long positions.
Resistance
A previous market high where market participants have been prepared enter short positions.
Range
An area between the support and resistance.
Relative Strength Index (RSI)
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine
overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be
overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.
Fibonacci Retracement
Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset
relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by
key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.
Moving Average Convergence Divergence (MACD)
A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is
calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the
MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the
crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator
for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would
suggest that the upward move could soon stall.
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Award winning broker
In 2015 FIS was named as the best performing inter-dealing broker in Iron Ore swaps and options by Singapore-based SGX
AsiaClear for the third consecutive year.
For More information on this report please contact:
Edward Hutton
Tel: +44(0)20 7090 1121
E-mail [email protected]
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Technical Analysis Glossary
Pivot Point
A point where the market makes a new high or low, before reversing in direction.
Trend Line
A directional line connecting pivot points.
Primary Trend
The main trend line over an extended period of time.
Secondary Trend
Distinct from but within the primary trend. Indicates recent trend.
Support
A previous market low where market participants have been prepared to enter long positions.
Resistance
A previous market high where market participants have been prepared enter short positions.
Range
An area between the support and resistance.
Relative Strength Index (RSI)
[Grab your reader’s attention with a great quote from the document or use this space to emphasize a key point. To place this
text box anywhere on the page, just drag it.]
i
Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine
overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be
overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.
Fibonacci Retracement
Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset
relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by
key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.
Moving Average Convergence Divergence (MACD)
A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is
calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the
MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the
crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator
for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would
suggest that the upward move could soon stall.
Award winning broker
In 2015 FIS was named as the best performing inter-dealing broker in Iron Ore swaps and options by Singapore-based SGX
AsiaClear for the third consecutive year.
For More information on this report please contact:
Edward Hutton
Tel: +44(0)20 7090 1121
E-mail [email protected]