Technical Analysis: LFEX Norway Exporters Salmon Index, 31st May 2024

David Nye - The London Fish Exchange

Published: 3rd June 2024

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

  

The Oslo FoB Index fell 14.5% during this week of trading. The Oslo FoB Index during this past week is what the Elliott Wave crowd like to call ‘wave 3’ type of action.

EVERYONE is on the same side of the trade, and the data being following is experiencing a very strong move up or down. I updated the horizontal support and resistance lines for your review. Looking back at the prior moves down in 2023, 2022, and 2021; you’ll notice that the Oslo FoB Index also experienced strong moves down in price and when a retracement (bounce). rally occurs the rally usually retraced 1/3, 1/2, or 2/3 of the prior move down.

The Composite Index is near the lower end of its displacement range. The low in the Composite Index’s displacement earlier this week was one of the four lowest displacements in the available history. What this usually means is the final lows are not in for the Oslo FoB Index however, the indicators will probably need to reset higher for another move down.

The RSI is also near the lower end of its displacement history. The recent displacement low in the RSI matched the displacement low of August 2023. The RSI did make lower displacement lows in 2022. Notice the prior displacement high in the RSI was near the 60-displacement area and the current low displacement is near the 20-displacement area. This is bearish displacement behaviour for the RSI indicator. During bear markets the RSI uses the 60ish displacement area as resistance and the 30ish displacement area for support.

A month or so ago I was asked about where the final price lows might be if the seasonality of the Oslo FoB Index continues. I drew in the purple trendline that connected the price lows of the prior four years of data. The current move down added another technique for looking for final price lows. I made a big assumption to provide these two price low forecasts, the 104.12 NOK resistance zone is the “middle of the move” down in price. I made a two rectangles, tan and grey, and measured from the 104.12 NOK price zone up to two prior price highs. I then made a copy of these rectangles and projected a lower price target down from the 104.12 NOK resistance zone. It’s interesting that the tan rectangle projecting a price target of 76.18 NOK is also on a horizontal support line. The likely final price lows are near where the grey rectangle is projecting, in the mid 60’s NOK
area.

In summary, the Oslo FoB Index probably needs to rally to reset the indicators. The retracement, when it occurs, will likely retrace 1/3, 1/2, or 2/3 of the prior move down. This points to the 99.57 NOK, 104.12 NOK and the 109.04 NOK horizontal resistance zones. At the same time, if I was trading the Oslo FoB Index, I would probably sit and wait for a rally and be looking to short the Oslo FoB Index when I see the proper set up. Trade with the trend, the trend for the Oslo FoB Index is down. Lower lows and lower highs.

  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