Technical Analysis: LFEX Norway Exporters Salmon Index, 1st November 2024

David Nye - The London Fish Exchange

Published: 4th November 2024

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

  

The Oslo FoB Index fell 2.59% to end the week at 73.68 NOK. This is another week of small price movements that didn’t require a lot of chart updating.

I did do some additional support and resistance work for your review. I have several independent techniques to calculate support and resistance. When overlaying these techniques over the chart, where two or three of these different techniques overlap reveals very strong support and resistance. I replaced the green and red support and resistance zones and replaced them where the support and resistance techniques overlapped at the same price. These lines are represented by a sold pink horizontal line which represents support. The pink dotted horizontal lines are where the resistance zones overlapped. I also moved the price I was projecting a bottom in the Oslo FoB Index earlier this year. Notice the pink rectangle projects a bottom around 68.02 NOK and the actual bottom was 67.80 NOK. Do you think that is coincidence? I’d say that’s pretty good projected target price. These newer rectangle target prices are very similar to the prior rectangle targets from previous updates.

The Oslo FoB Index tested the 71.40 pink support zone and bounced and came very close to testing the black upward trendline that connects the past few years price lows. The black dotted downward sloping trendline and the pink downward sloping trendline will offer additional resistance when tested. The 76.72 NOK horizontal resistance zone along with the two trendlines, once broken, will likely signal the start of the next leg up to higher Oslo FoB Index prices.

The Composite Index is displaying a strong bullish signal. The Composite Index is at a lower displacement than it’s prior low while the Oslo FoB Index at trading at a higher price. The Composite Index is more oversold at higher prices. The Composite Index is also diverging with RSI, which means this move down is running out of momentum. The Composite Index is also rallying to test the negative crossover of its moving averages, this isn’t bullish. It will be interesting to see which observations are stronger, the Composite Index displaying bullish divergence and being more oversold at higher prices or rallying into the negative crossover of its moving averages. In my opinion, I’m leaning towards the bullish side of these observations.

The RSI fell to the 38 (ish) displacement. This is the same displacement the RSI has used for support during uptrends in the past. The RSI is also rallying to test the negative crossover of it’s moving averages. Similar to the Composite Index, this is a bit concerning, but I believe that this signal should be given less of a probability currently. The RSI also has some history near this displacement that the RSI has used for support and resistance.

In summary, with the RSI bouncing off the displacement it has used in the past in bullish trends, the bullish divergence between the Composite Index and the RSI, and both indicators are near the lower end of their displacement ranges, I believe we are in the early stages of the start of the Oslo FoB Index seasonal rally. The troubling issue is that the 76 NOK area with the confluence of resistance will require a large amount of energy to overcome.

  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