Rubber price - bullish

The price of rubber has been trading sideways between $150 and $180 for more than three months in the month of April through mid July. The price went above the $180 level just a week ago, indicating that the correction is over and the bulls are taking charge. The price trend is generally up as the long term 90 day has been increasing since April. The short term 30 and 60-day moving averages have now started to converge with the long term average after declining for more than two months.


Daily Rubber (TOCOM Rubber futures) chart with volume as at 31 July 2009 using NextVIEW Advisor Professional

The breakout of the correction period is supported by strong bullish momentum. The RSI, MACD and Momentum indicators are making new highs and this means that there is a high chance that the price may continue to go higher. Based on a chart pattern formation, the immediate price target for rubber is $210 with an extended target at $230, based on a Fibonacci retracement level of 50% from the long term bear trend that started in mid-2008. Support level is current at $180, the previous resistance level that was broken. If the price falls back below $180, then we may expect price to move sideways again.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.