Technical Analysis: LFEX Norway Exporters Salmon Index, 22nd March 2024

David Nye - The London Fish Exchange

Published: 25th March 2024

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

  

The Oslo FoB Index rallied to finish up 15.29% for this week of trading. The first thing I see when looking at the Oslo FoB Index chart is prices have moved into new recent highs.

The Oslo FoB Index is now testing the 125.47 horizontal resistance zone and the red resistance trendline drawn off the recent prior highs. The Oslo FoB Index has slightly broken above the horizontal 125.47 NOK and the red upward sloping resistance line. The Oslo FoB Index fell and tested the green dotted horizontal support line and the green upward sloping support line last week. The Oslo FoB Index prices held these support zones and used this support for a big rally. The Oslo FoB Index also broke above the steep red downward sloping trendline. The string of lower lows and lower price highs has changed significantly during this week of trading. I’m seeing a confluence of price targets in the 130.96 NOK and 136.93 NOK price areas. When you get several different techniques pointing at the same target, the probability of reaching that target is higher. Looking back at the full history of the available data for the Oslo FoB Index, I see that each year when the prices have peaked in the March to May time frame, prices tend to make slightly higher highs each year. This is represented by the purple upward sloping trendline.

The Composite Index has made a move up from the lower end of its displacement range to the higher end of its displacement range. The Composite Index does have history of making turns at this displacement. The Composite Index is above the two most recent highs, implying there is additional strength in this price move. I’m not seeing any short-term divergence between the Composite Index vs the Oslo FoB Index. I am seeing some divergence between the Composite Index and the RSI, represented by the black trendlines drawn on the indicators.

The RSI is above the displacements it has used for resistance during bear markets. The RSI also held the low displacements it has used as support when the Oslo FoB Index is in a bull market. The RSI does have some history making turns at its current displacement.

In summary, the Oslo FoB Index appears it wants to go to higher prices but may need a pullback in prices to reset the indicators to lower displacements. Normally when I see weakness in a securities chart, it’s when the Composite Index is diverging with the price of the security and/or the RSI. The first obstacle for higher prices is clearly breaking above the 125.47 NOK horizontal resistance zone and the red upward sloping resistance line. If the Oslo FoB Index is overcome with sellers, I’ve updated the support zones under the Oslo FoB Index. The green upward sloping trendlines should also offer some support.

The bearish view of the Oslo FoB Index, I do see some bearish divergence between the Composite Index and the RSI. We are also in the time of year when the Oslo FoB Index has historically made its seasonal highs. There is also bearish divergence between the Oslo FoB Index and the Composite Index going back to November of 2023 and early 2024. The Composite Index is at a lower displacement while the Oslo FoB Index is at higher prices. These longer-term signals do tend to lose their strength over time.

  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