Commodities: Rubber Price Analysis September

Rubber futures prices soared to 11-month in mid of September at JPY$218.4 per kg after breaking the JPY$214 resistance level in a second attempt but the rally failed to extend further. Price of rubber futures (RSS3) in TOCOM then pulled back 7% to close at JPY$199 on September 30 lower than the closing price a month ago. Rubber price fell JPY$12.7 or 6.8% month-to-month.

The short term 30-day moving average has started to decline since a week ago but the longer term 60- and 90-day moving average is still increasing. Price of rubber is above these two long term averages but below the short term average. The price action indicates an uptrend correction. The divergence between price and momentum indicators like RSI and MACD shows that the bears are still in control and therefore provide strong resistance for price to move higher.

Support level remains strong at JPY$190 and is this price level is broken, price may fall further to the next support level at JPY$176. If price can still maintain above this support level, there is a high chance that the price may rally to test the JPY$220 high again.


Daily TOCOM rubber futures price as at 30 September 2009 using NextVIEW Advisor

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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.