Technical Analysis: LFEX Norway Exporters Salmon Index, 4th April 2024

David Nye - The London Fish Exchange

Published: 8th April 2024

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

  

The Oslo Fob Index rallied 1.73% from Wednesday April 27 through Friday April 5th. The Oslo FoB Index is testing the pink resistance line that connects the last two years highs and the underside of the 142.75 NOK horizontal resistance zone.

I’m impressed the Oslo Fob Index is holding the steep uptrend angle represented by the green trendline connected to the recent prices. I mentioned in a previous update that I had several different techniques pointing towards the 142.75 NOK price as a resistance target. I’d think the pink trendline connecting the previous years highs and on top of the 142.75 NOK horizontal resistance zone would be strong enough to slow the steep ascent. We are going to find out if the Oslo Fob Index has enough energy to keep moving higher.

I reworked the support and resistance zones using two different techniques represented by horizontal green solid and dashed lines. The red dotted lines are the price resistance zones.

The Composite Index is showing bearish divergence with the Oslo FoB Index. Since the most recent high in the Composite Index, the Composite displacement is going down while the Oslo Fob Index heading higher. The Composite Index has used its current displacement as resistance, but I don’t see the Composite Index using this displacement as support in the available history. The likely near-term target is the fast red moving average. Notice the moving averages on the Composite Index now have a positive displacement and they are diverging. The Composite Index is going down to possibly test the positive crossover.

The RSI is also showing bearish divergence with Oslo Fob Index. This is a concerning development if you’re looking for higher prices. The RSI isn’t great a tool for showing divergence at turns. The fact the RSI is diverging with the Oslo FoB Index should get your attention. The RSI is also testing the underside of the pink trendline connecting a prior bearish divergence signal. This is additional resistance for the RSI. Like the Composite Index, the RSI is moving down to test the positive crossover of its moving averages. The moving averages are also diverging.

If you look closely at the last three days of trading, the Composite Index is moving down, while the RSI is moving up, more bearish short-term divergence.

In summary, the Oslo FoB Index has both some bullish and bearish developments. The bullish case is the Oslo Fob Index is climbing at a very steep angle, which is a sign of strength. The moving averages on the indicators now have a positive displacement. If the indicators can bounce back up after testing the positive crossover of their moving averages, this usually signals another strong move up in prices.

The bearish case is the Oslo FoB Index is it is testing a pink trendline that connects the past two years highs. It is also close to testing the 142.75 NOK horizonal resistance zone. The steep angle the Oslo FoB Index is using for its rally is unsustainable for a long period of time. There is bearish divergence in both indicators. More troubling is the RSI is also diverging the Oslo Fob Index. The Oslo FoB Index has made modestly higher highs the last two years. So far this year, the Oslo FoB Index has just made another modestly higher high from prior years highs.

Breaking the green steep uptrend line will be the one of the first signs the rally is losing momentum. The logical downside short term target is the 124.47 NOK and 126.32 NOK horizontal trendlines. The reason I’m suggesting this price area is there are two different support techniques overlapping in this price area. This price area also has the pink dotted upward sloping trendline and the blue dotted trendlines intersecting in this price area.

  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