Morning Update - FKLI & FCPO Levels

Morning Traders,

New day, fresh start!

Ok lets get going.

The US Market reacted positively ti the ISM report last night and closed positively.

The Dow closed up +52 points or 0.40% to close at 13,264

The S&P500 closed up +11 points or 0.75% to close at 1,419

The Nasdaq closed up +28 points of 0.91% to close at 3,120

So as of now, the June S&P contract has pulled back to 1412 from 1418 high last night and staying above the 20ema.

The US market is still doing what it should be doing inside the upside channel so we will take this information and use it accordingly.

This will aid our local market to try and push to further new highs.

It is difficult to say what will happen at new highs. Sometimes, at one point, sellers will come in but will not overcome the sheer enthusiasm of the buyers and the short covering will push the index higher. At times, the enthusiasm wanes and sellers are able to take control of the market for a pullback swing. But I don't think it is today.

Keeping in mind that there are some economic data tonight in the US, I am still biased for a range trading session to a slightly upside biased market. For buying scalpers, look for areas of support to hold, then go long to test the next area of resistance. If momentum looks like it is slowing down for the moment, do not hesitate to take profit. As for selling scalpers, I would wait for price to finish its march up, and look for resistance area to hold and maybe sell the pullback and take quick scalps.

Either way, we will let price action be our guide. Do not fight the trend.

Here are the levels for the April FKLI contracts today:

Upper Resistance: 1606, 1609

Lower Support: 1596-95 area, 1593, 1588 and 1580.

Ok I will update the FCPO contract shortly

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FCPO

Ok first we will look at the 4 overseas CME grains that we are tracking

Soybean Oil Future close 56.22 up from 555
Soybean Futures close 1421.25 up from 1407
Wheat Futures close 657.25 down from 663.75
Corn Futures close 657 up from 649.50

Soybean Oil Futures are now (typo) testing the upper range of our broadening wedge pattern of 56.20 as we have updated on the weekly update. Soybean Futures already tested the upper resistance of 1429 by touching a high of 1433.75 last night before giving back a bit of the gains.

As for Wheat, and Corn, both of these contracts are still trading within its consolidation pattern. Corn is demonstrating a positive closing while Wheat closed lower for the day. I expect both of these contracts to be choppy until further breakouts.

Taking in mind that both Soybean Oil and Soybean Futures are also trading at resistance, I will want to see a breakout before a committing to a bullish trend.

How will it affect us:

Ok please be reminded that we had a big gap last in yesterday's trade.

You can read about the weekly update by clicking here for the levels.

So what is in store for us:

Here are the possible range from the daily chart:

Upper Resistance: 3550, 3590, 3560
Lower Support: 3510, 3497, 3480

It is difficult to say whether the buyers or the sellers will exert a stronger influence. The chart looks like it wants to break up further today. However, I also have the gap-fill in the back of my mind in the coming days.

In any case, I think we will let price action be our guide and not guess the direction of the market before price itself has committed to a direction.

For buying scalpers, find the areas of support and see if price holds. If it does, place a buy stop just outside of the range and wait for price to break out and ride the trend and do not hesitate to take quick profits.

For sellers, find areas of resistance and if price cannot break through the area, place a sell stop just below the range so that when price breaks down from the range, it will take you along in its ride down.

So trade safe all.

I'll update as and when there are important news and price movements in the relevant markets.


Best Wishes,
Tech Trader