Technical Analysis: LFEX Norway Exporters Salmon Index, 14th June 2024

David Nye - The London Fish Exchange

Published: 17th June 2024

This Article was Written by: David Nye - The London Fish Exchange

  

The Oslo FoB Index rallied 4.4% during this week of trading to finish the week at 82.28 NOK.

The first thing I noticed was the purple upward sloping trendlines that connects the past years seasonal price lows helped stopped the rapid decline in prices. I reworked the horizontal resistance lines above the current Oslo FoB Index price for your review.

The big question in my mind is how high will the Oslo FoB Index bounce before the next leg down in prices resumes? Remember that the trend in prices is down. The logical targets are in the 92 NOK to 102.58 NOK price area. I’d think that the two horizontal resistance zones in the 90’s NOK are the most likely. There is no time expectation for these possible price targets. With the steepness in the most recent decline in prices the probability of getting a large retracement of the prior price decline is diminished. This makes the 92.25 horizontal resistance zone the most likely target if the Oslo FoB Index can continue to rally. The rally from mid-April to mid-May appears to be simple, clean wave. Meaning, if we are seeing a larger bounce in prices for the Oslo FoB Index, this rally will likely have a more complex wave formation then the rally from mid-April to mid-May 2024.

The Composite Index has made a significant move higher while the Oslo FoB Index has made a much smaller proportional move. We’ve seen this type of setup before and it’s usually not a bullish development. The Composite Index has used its current displacement as support and resistance in the past.

The RSI is also continuing to move to higher. The RSI is now near displacements it has used for past support and resistance. Notice that in August 2022 the RSI made a W formation and the middle part of the W used this displacement as resistance. The RSI also used this displacement for support on July 16th 2023 and August 7th 2023. Notice how large the negative displacement is between the RSI’s moving averages. Historically, this is a large spread between the fast- and slow-moving averages. This will need to correct itself and the moving averages now appear to be starting to converge.

In summary, the Oslo FoB Index is due for a relief rally to offset its oversold condition and let the indicators reset. I believe this is a rally in a bear market based upon the recent indicator characteristics. Meaning, I’d be looking for a rally and then wait for a sell signal to short the Oslo FoB Index if I was trading the Oslo FoB Index.

  About This Analysis

About David Nye

David is a Senior Vice President in investment advisory with over 30 years of experience.

Based in Minnesota, USA he has a long history in technical analysis across a range of markets. David brings his experience to provide an independent insight into potential salmon pricing based on LFEX and DataSalmon data.

What is Technical Analysis?

Technical Analysis is used to try and identify price trends in the future. Analysts believe that by using factual past information (trading activity and price changes) it is possible to identify future price movement trends and is quite prevalent in commodity and forex markets but can be applied to any product.

Technical Analysis has been developing for over a century, and there are now hundreds of patterns and signals that have been created. They are often used in conjunction with other forms of research and analysis to help formulate, or support pricing trend opinions.

Purpose of the Analysis?

To provide an independent data-driven view of market pricing trends in the short and medium-term. As a potential tool, for users to access future pricing trends based on LFEX/DataSalmon derived market data.

How Does it Work?

On a regular basis (weekly), David will provide his independent analysis of LFEX and DataSalmon pricing data. The output will be to provide pricing trends based on the most up to date pricing received.

The analysis will show the expected trends and potential (price) levels, as well as other markers – for example, higher or lower price triggers that would affect the analysis of the trend – and what this might mean. It is data-driven, and will not, and does not, account for any other fundamental analysis, or weather or biological events for example. This is the same for any commodity product technical analysis.

Disclaimer

All information provided contains no guarantee whatsoever, especially of completeness, accuracy, timeliness or of the results obtained from the use of this information, and is provided without warranty of any kind, expressly or implied. In no event will, LFEX Ltd or DataSalmon, its member firms, or the partners, directors, officers, owners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information or for any consequential, special or similar damages, even if advised of the possibility of such damages. In no event and under no legal or equitable theory, whether in tort, contract, strict liability or otherwise, shall LFEX Ltd or DataSalmon be liable for any direct, indirect, special, incidental or consequential damages arising out of any use of the information contained herein, including, without limitation, damages for lost profits, loss of goodwill, loss of data, work stoppage, the accuracy of results, or computer failure or malfunction