Rubber (TOCOM): Support level at JPY$200.

Rubber prices (based on Tokyo Commodities Exchange (TOCOM) RSS3 futures) continue to soar 15.5% from JPY$200 last month to a one year high of JPY$231.20 after the price broke the JPY$220 resistance level in mid October. Rising demand and increase in crude oil price helped boost rubber price. Price is in a good healthy up trend. The short to long term 30 to 90-day moving averages continue to increase.

Technical indicators are mixed. The Relative Strength Index (RSI) and Momentum indicators are declining but still above the mid level. This means that the uptrend is still supported by good bullish strength. However, the MACD indicator looks like it is going to cross below its trigger line. Stochastic indicator was overbought and has started to reverse downwards.

Despite a bullish rebound on the 30th October, the price of rubber is expected to correct further with a support level at JPY$220. Price should continue its uptrend if price can stay above this support level. If it breaks the support level, then it may come back to JPY$200 levels. The uptrend may resume if price breaks above JPY$235 resistance level and the next level it is expected to go is JPY$256, but I think it is unlikely going to happen in the next the months.


Daily Rubber (RSS3 on TOCOM) chart as at 30 October 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.